ITEM 2. Management report and analysis of the financial situation and operating results

The Company’s condensed consolidated statements of earnings for the three and six month periods ended June 30, 2022 and 2021 reflect the consolidated operations of the Company and its subsidiaries.

CECO Environmental Corp. ("CECO," "we," "us," or the "Company") is a leading
environmentally focused, diversified industrial company whose solutions protect
people, the environment, and industrial equipment. We focus on engineering,
designing, building, and installing systems that capture, clean and destroy air-
and water-borne emissions from industrial facilities as well as fluid handling,
gas and water separation, and filtration systems. CECO provides innovative
technology and application expertise that helps companies grow their businesses
with safe, clean, and more efficient solutions to protect our shared
environment.

CECO serves diverse industries globally by working to improve air and water
quality, protect customer's equipment, and provide customized engineered
solutions in our customers' mission critical applications. The industries CECO
serves include power generation, petrochemical processing, general industrial,
refining, midstream oil & gas, electric vehicle production, poly silicon
fabrication, battery recycling, and wastewater treatment, along with a wide
range of other industries.

COVID-19[feminine]

A novel strain of coronavirus ("COVID-19") surfaced in late 2019 and has spread
around the world, including to the United States. In March 2020, the World
Health Organization characterized COVID-19 as a pandemic. The COVID-19 pandemic
persists in geographic areas in which we have operations, suppliers, customers
and employees, and has had a significant impact on worldwide economic activity
and on macroeconomic conditions and the end markets of our business.

As a key supplier to critical infrastructure projects, CECO has worked to
maintain ongoing operations. Within the United States, certain portions of our
business have been designated an essential business, and we continue to operate
our business in compliance with applicable state and local laws and are
observing recommended Centers for Disease Control and Prevention guidelines to
minimize the risk of spreading the COVID-19 virus including implementing, where
possible, work-from-home procedures and additional sanitization efforts where
facilities remain open to provide necessary services. This allows us to continue
to serve our customers, however, the COVID-19 pandemic has also disrupted our
international operations. Some of our facilities and our suppliers have
experienced temporary disruptions as a result of the COVID-19 pandemic, and we
continue to work closely with our global supply chain to proactively support
customers during this critical time. We cannot predict whether our facilities
will experience more significant disruptions in the future or the impact on our
suppliers.

The senior management team meets regularly to review and assess the status of
the Company's operations and the health and safety of its employees. The senior
management team continues to monitor and manage the Company's ability to operate
effectively. We are currently experiencing shortages of raw materials and
inflationary pressures for certain materials and labor. We expect these supply
chain challenges and cost impacts to continue for the foreseeable future as
markets recover. Although we have secured additional raw materials from existing
and alternate suppliers and have taken other mitigating actions to mitigate
supply disruptions, we cannot guarantee that we can continue to do so in the
future. In this event, our business, results and financial condition could be
adversely affected. Although vaccines are available in various countries where
we operate, health concern risks remain and notwithstanding the Company's
continued efforts, it is possible the COVID-19 pandemic could further impact our
operations and the operations of our suppliers and venders, particularly in
light of newly emerging variant strains of the virus becoming more dominant and
the potential resumption of high levels of infection and hospitalization. We
cannot predict whether any of our manufacturing, operations or suppliers will be
disrupted by these events, or how long such disruptions would last. COVID-19 has
had and may have further negative impacts on our operations, customers and
supply chain despite the preventative and precautionary measures being taken.



                                       18
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Note regarding the 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, divestitures and the
items described below in "Consolidated Results." The Company believes that
evaluation of its financial performance compared with prior and future periods
can be enhanced by a presentation of results that exclude the impact of these
items. The Company has incurred substantial expense and income associated with
the acquisition and divestitures. 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.

Results of Operations

Consolidated Results

Our Condensed Consolidated Statements of Earnings for the Three and Six Month Periods Ended June 30, 2022 and 2021 are as follows:

                                           Three months ended June 30,             Six months ended June 30,
(dollars in millions)                       2022                   2021             2022               2021
Net sales                              $         105.4         $       78.7     $      197.8       $      150.6
Cost of sales                                     73.7                 53.5            139.7              100.9
Gross profit                           $          31.7         $       25.2     $       58.1       $       49.7
Percent of sales                                  30.1 %               32.0 %           29.4 %             33.0 %
Selling and administrative expenses               23.0                 20.6             41.6               40.0
Percent of sales                                  21.8 %               26.2 %           21.0 %             26.6 %
Amortization and earnout expenses                  1.5                  2.3              2.9                4.1
Restructuring expenses                               -                  0.3              0.1                0.3
Acquisition and integration expenses               1.5                    -              2.5                0.1
Operating income                       $           5.7         $        2.1     $       11.0       $        5.2
Operating margin                                   5.4 %                2.7 %            5.6 %              3.5 %


To compare operating performance between the three-month and six-month periods
ended June 30, 2022 and 2021, the Company has adjusted GAAP operating income to
exclude (1) amortization of intangible assets, earnout and retention expenses,
(2) restructuring expenses primarily relating to severance, facility exits, and
associated legal expenses, and (3) acquisition and integration expenses, which
include legal, accounting, and other expenses.

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

                                           Three months ended June 30,              Six months ended June 30,
(dollars in millions)                      2022                  2021               2022                  2021
Operating income as reported in
accordance with GAAP                   $         5.7         $         2.1     $         11.0         $        5.2
Operating margin in accordance with
GAAP                                             5.4 %                 2.7 %              5.6 %                3.5 %
Amortization and earnout expenses                1.5                   2.3                2.9                  4.1
Restructuring expenses                             -                   0.3                0.1                  0.3
Acquisition and integration expenses             1.5                     -                2.5                  0.1
Non-GAAP operating income              $         8.7         $         4.7     $         16.5         $        9.7
Non-GAAP operating margin                        8.3 %                 6.0 %              8.3 %                6.4 %




                                       19
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Net sales for the second quarter of 2022 increased $26.7 million, or 33.9%, to
$105.4 million compared with $78.7 million in the second quarter of 2021. The
increase is primarily attributable to increases of $8.4 million in our thermal
acoustics technologies, $5.2 million in our damper and expansion products, $4.2
million in our emissions management technologies, $2.7 million across our entire
industrial process solutions platforms, $2.7 million in our engineered cyclone
systems, and $2.6 million in our separation and filtration technologies. For the
$26.7 million increase in net sales, $22.1 million is attributable to organic
growth, while $4.6 million is attributable to current year acquisitions.

Net sales for the first six months of 2022 increased $47.2 million, or 31.4%, to
$197.8 million compared with $150.6 million in the first six months of 2021. The
increase is primarily attributable to increases of $13.1 million in our
emissions management technologies, $11.6 million in our thermal acoustics
technologies, $7.5 million in our damper and expansion products, $6.5 million in
our engineered cyclone systems, $3.9 million in our industrial air control
technologies, and $3.9 million in our duct fabrication products and services.
For the $47.2 million increase in net sales, $41.9 million is attributable to
organic growth, while $5.3 million is attributable to current year acquisitions.

Gross profit increased $6.5 million, or 25.8%, to $31.7 million in the second
quarter of 2022 compared with $25.2 million in the second quarter of 2021. The
increase in gross profit is primarily attributable to in the increase in sales
volume as described above. Gross profit as a percentage of sales decreased 1.9%
to 30.1% in the second quarter of 2022 compared with 32.0% in the second quarter
of 2021 due to inflation, supply chain challenges, and lower project margin mix
executed during the three-month period ended June 30, 2022, partially offset by
price increases.

Gross profit increased $8.4 million, or 16.9%, to $58.1 million in the first six
months of 2022 compared with $49.7 million in the first six months of 2021. The
increase in gross profit is primarily attributable to in the increase in sales
volume as describe above. Gross profit as a percentage of sales decreased to
29.4% in the first six months of 2022 compared with 33.0% in the first six
months of 2021 due to inflation, supply chain challenges, and lower project
margin mix executed during the six-month period ended June 30, 2022, partially
offset by price increases. We continue to experience shortages of raw materials
and inflationary pressures for certain materials and labor. We expect these
supply chain challenges and cost impacts to continue for the foreseeable future
as markets recover. Although we have secured additional raw materials from
existing and alternate suppliers and have taken other mitigating actions to
mitigate supply disruptions, such as implementing price increases and applying
material surcharges. We cannot guarantee that we can continue to do so in the
future. In this event, our business, results and financial condition could be
adversely affected.

Orders booked increased $28.0 million, or 32.7%, to $113.5 million during the
second quarter of 2022 compared with $85.5 million in the second quarter of
2021. The increase is primarily attributable to increases of $34.2 million in
our separation and filtration technologies, $5.0 million in our thermal
acoustics technologies, $4.9 million in our industrial air control technologies,
and $4.2 million in our damper and expansion products partially offset by a
decrease of $20.2 million in our emissions management technologies. For the
$28.0 million increase in orders, $23.0 million is attributable to organic
growth, while $5.0 million is attributable to current year acquisitions.

Orders booked were $274.4 million for the first six months of 2022 compared with
$177.6 million during the first six months of 2021, an increase of $96.8
million, or 54.5%. The increase is primarily attributable to increases of $37.2
million in our separation and filtration technologies, $27.9 million in
industrial air control technologies, and $27.4 million in our thermal acoustics
technologies. For the $96.8 million increase in orders, $90.9 million is
attributable to organic growth, while $5.9 million is attributable to current
year acquisitions.

Selling and administrative expenses were $23.0 million for the second quarter of
2022 compared with $20.6 million for the second quarter of 2021. The increase is
primarily attributable to acquisitions during 2022, as well as inflationary
increases for wages and services. Selling and administrative expenses as a
percentage of sales was 21.8% in the second quarter of 2022 compared with 26.2%
in the second quarter of 2021. The decrease in percentage is primarily
attributable to the increase in net sales.

Selling and administrative expenses were $41.6 million for the first six months
of 2022 compared with $40.0 million for the first six months of 2021. The
increase is primarily attributable to acquisitions during 2022, as well as
inflationary increases for wages and services. Selling and administrative
expenses decreased as a percentage of sales to 21.0% in the first six months of
2022 compared with 26.6% in the first six months of 2021. The decrease in
percentage is primarily attributable to the increase in net sales.

Amortization and earnout expense was $1.4 million for the second quarter of 2022
compared with $2.3 million for the second quarter of 2021. The decrease in
expense is attributable to a decrease of $0.6 million in earnout expense and
$0.3 million decrease in definite lived asset amortization.

                                       20
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Amortization expense was $2.9 million for the first six months of 2022 compared
with $4.1 million for the first six months of 2021. The decrease in expense is
attributable to a decrease of $0.7 million in earnout expense and $0.5 million
decrease in definite lived asset amortization.

Operating income increased $3.6 million to $5.7 million in the second quarter of
2022 compared with $2.1 million during the second quarter of 2021. Operating
income increased $5.8 million to $11.0 million in the first six months of 2022
compared with $5.2 million during the first six months of 2021. The increase in
operating income for the three- and six-month periods ended June 30, 2022 are
primarily attributable to increases in sales.

Non-GAAP operating income was $8.7 million for the second quarter of 2022
compared with $4.7 million for the second quarter of 2021. The increase of $4.0
million in non-GAAP operating income is primarily attributable to the increase
in net sales. Non-GAAP operating income as a percentage of sales increased to
8.2% for the second quarter of 2022 from 6.0% for the second quarter of 2021.

Non-GAAP operating income was $16.5 million for the first six months of 2022
compared with $9.7 million for the first six months of 2021. The increase of
$6.8 in non-GAAP operating income is primarily attributable to the increase in
net sales. Non-GAAP operating income as a percentage of sales increased to 8.3%
for the first six months of 2022 from 6.4% for the first six months of 2021.

Interest expense increased to $1.1 million in the second quarter of 2022 and
$1.9 million for the first six months of 2022 compared with interest expense of
$0.7 million in the second quarter of 2021 and $1.4 million for the first six
months of 2021. The increase in interest expense is primarily due to increased
debt balances for the three- and six-month periods in 2022 compared to 2021.

Income tax expense was $1.9 million for the second quarter of 2022 and $3.0
million for the first six months of 2022 compared with income tax expense of
$0.2 million for the second quarter of 2021 and $0.8 million for the first six
months of 2021. The effective income tax rate for the second quarter of 2022 was
28.3% compared with 34.3% for the second quarter of 2021. The effective income
tax rate for the first six months of 2022 was 28.3% compared with 30.9% for the
first six months of 2021. The effective income tax rate for the three- and
six-months ended June 30, 2022 is different than the United States federal
statutory rate. Our effective tax rate is affected by certain other permanent
differences, including state income taxes, non-deductible incentive stock-based
compensation, and differences in tax rates among the jurisdictions in which we
operate.

Business Segments

The Company's operations are organized and reviewed by management along its
product lines or end market that the segment serves and are presented in two
reportable segments. The results of the segments are reviewed through "Income
from operations" on the unaudited Condensed Consolidated Statements of Income.

                                            Three months ended June 30,            Six months ended June 30,
(dollars in thousands)                       2022                 2021              2022               2021
Net sales (less intra-, inter-segment
sales)
Engineered Systems segment              $        67,333       $      43,360     $     124,308       $    85,417
Industrial Process Solutions segment             38,042              35,320            73,503            65,155
Net sales                               $       105,375       $      78,680     $     197,811       $   150,572




                                            Three months ended June 30,            Six months ended June 30,
(dollars in thousands)                       2022                 2021              2022               2021
Income from Operations
Engineered Systems segment              $        9,006       $        5,634     $      15,476       $    11,804
Industrial Process Solutions segment             5,482                4,441             9,621             8,263
Corporate and Other(1)                          (8,742 )             (7,930 )         (14,147 )         (14,868 )
Income from operations                  $        5,746       $        2,145     $      10,950       $     5,199

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

Engineering Systems Segment

Our Engineered Systems segment net sales increased $23.9 million to $67.3
million for the second quarter of 2022 compared with $43.4 million in the second
quarter of 2021. The increase is primarily attributable to increases of $8.4
million in our thermal acoustics technologies, $5.2 million in our damper and
expansion products, $4.2 million in our emissions management technologies, $2.7
million in our engineered cyclone systems, and $2.6 million in our separation
and filtration technologies. For the $23.9 million increase in net sales, $19.3
million is attributable to organic growth, while $4.6 million is attributable to
current year acquisitions.

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Our Engineered Systems segment net sales increased $38.9 million to $124.3
million in the first six months of 2022 compared with $85.4 million in the first
six months of 2021. The increase is primarily attributable to increases of $13.1
million in our emissions management technologies, $11.6 million in our thermal
acoustics technologies, $7.5 million in our damper and expansion products, and
$6.5 million in our engineered cyclone systems. For the $38.9 million increase
in net sales, $33.6 million is attributable to organic growth, while $5.3
million is attributable to current year acquisitions.

Operating income for the Engineered Systems segment increased $3.4 million to
$9.0 million in the second quarter of 2022 compared with $5.6 million in the
second quarter of 2021. The operating income increase is primarily attributable
to higher gross profit related to increased sales of $23.9 million.

Operating income for the Engineered Systems segment increased $3.7 million to
$15.5 million in the first six months of 2022 compared with $11.8 million in the
first six months of 2021. The operating income increase is primarily
attributable to higher gross profit related to increased sales of $38.9 million.

Segment Industrial Process Solutions

Our Industrial Process Solutions segment net sales increased $2.7 million to
$38.0 million in the second quarter of 2022 compared with $35.3 million in the
second quarter of 2021. The increase is primarily attributable to increases
across all products serving industrial air end markets. The total increase of
$2.7 million in net sales is attributable to organic growth.

Our Industrial Process Solutions segment net sales increased $8.3 million to
$73.5 million in the first six months of 2022 compared with $65.2 million in the
first six months of 2021. The increase is primarily attributable to increases of
$3.9 million in our industrial air control technologies, and $3.9 million in our
duct fabrication products and services. The total increase of $8.3 million in
net sales is attributable to organic growth.

Operating income for the Industrial Process Solutions segment increased $1.1
million to $5.5 million in the second quarter of 2022 compared with $4.4 million
in the second quarter of 2021. The increase is primarily attributable to higher
gross profit related to increased sales of $2.7 million, and $0.7 million in
lower amortization and earnout expenses.

Operating income for the Industrial Process Solutions segment increased $1.3
million to $9.6 million in the first six months of 2022 compared with $8.3
million in the first six months of 2021. The increase is primarily attributable
to higher gross profit related to increased sales of $8.3 million, offset by a
$1.5 million increase in selling and administrative expense.

Corporate sector and others

Operating expense for the Corporate and Other segment increased $0.8 million to
$8.7 million for the second quarter of 2022 compared with $7.9 million for the
second quarter of 2021. The increase is attributable to increases in acquisition
and integration expenses of $0.9 million.

Operating expense for the Corporate and Other segment decreased $0.8 million to
$14.1 million for the first six months of 2022 compared with $14.9 million for
the first six months of 2021. The decrease is primarily attributed to a $2.5
million favorable insurance settlement received in the first quarter of 2022,
partially offset by inflationary increases for wages and services.

Back

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 $288.7 million as of
June 30, 2022 from $213.9 million as of December 31, 2021. Our customers may
have the right to cancel a given order. Historically, cancellations have not
been common. 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 18 months. Backlog is not defined by GAAP and our methodology for
calculating backlog may not be consistent with methodologies used by other
companies.

New accounting statements

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

Cash and capital resources

                                       22
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When we undertake large jobs, our working capital objective is to make these
projects self-funding. We work to achieve this by obtaining initial down
payments, progress billing contracts, when possible, utilizing extended payment
terms from material suppliers, and paying sub-contractors after payment from our
customers, which is an industry practice. Our investment in net working capital
is funded by cash flow from operations and by our revolving line of credit under
our Credit Facility (as defined below).

At June 30, 2022, the Company had working capital of $74.7 million, compared
with $72.3 million at December 31, 2021. The ratio of current assets to current
liabilities was 1.52 to 1.00 on June 30, 2022, as compared with a ratio of 1.62
to 1.00 at December 31, 2021.

At June 30, 2022 and December 31, 2021, cash and cash equivalents totaled $34.4
million and $29.9 million, respectively. As of June 30, 2022 and December 31,
2021, $26.5 million and $22.6 million, respectively, of our cash and cash
equivalents were held by certain non-United States subsidiaries, as well as
being denominated in foreign currencies.

The debt consisted of the following:

(table only in thousands)                             June 30, 2022       December 31, 2021
Outstanding borrowings under the Credit Facility
(defined below).
Term loan payable in quarterly principal
installments of $0.6 million through September
2023, and $0.8 million through September 2025 and
$1.1 million thereafter with balance due upon
maturity in September 2026.
 - Term loan                                         $        42,410     $  

43,511

 - Revolving Credit Loan                                      44,700        

22,000

 Total outstanding borrowings under the Credit
Facility                                                      87,110        

65,511

 Outstanding borrowings under the joint venture
term debt                                                     10,506                       -
 Unamortized debt discount                                    (1,545 )      

(1,731)

 Total outstanding borrowings                        $        96,071     $  

63,780

 Less: current portion                                        (3,303 )      

(2,203)

 Total debt, less current portion                    $        92,768     $            61,577


Credit Facility

The Company's outstanding borrowings in the United States consist of a senior
secured term loan and 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 June 30, 2022 and December 31, 2021, the Company was
in compliance with all related financial and other restrictive covenants under
the Credit Facility.

See Note 7 to the unaudited condensed consolidated financial statements in Item 1 of this Quarterly Report on Form 10-Q for more information on the Company’s credit facilities.

The total availability of unused credit under our existing credit facility is as follows:

(dollars in millions)                                 June 30, 2022       December 31, 2021
Credit Facility, revolving loans                     $         140.0     $             140.0
Draw down                                                      (44.7 )                 (22.0 )
Letters of credit open                                         (20.7 )                 (14.5 )
Total unused credit availability                     $          74.6     $             103.5

Amount available according to borrowing limits $62.4 $

             45.9


Overview of cash flow and liquidity

                                                        For the six months ended June 30,
(dollars in thousands)                                     2022             

2021

Net cash provided by operating activities            $          18,691       $         4,109
Net cash used in investing activities                          (38,797 )                (463 )
Net cash (used in) provided by financing
activities                                                      26,655                (6,423 )
Effect of exchange rate changes on cash and cash
equivalents                                                     (3,091 )                (514 )
Net (decrease) increase in cash                      $           3,458       $        (3,291 )


Operating Activities

                                       23
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For the six months ended June 30, 2022, $18.7 million of cash was provided by
operating activities compared with $4.1 million provided by operations in the
prior year period, a $14.6 million increase. Cash flow from operating activities
in the first six months of 2022 had a favorable impact year-over-year primarily
due increase in net income and certain improvements in net working capital.

Investing activities

For the six months ended June 30, 2022, net cash used in investing activities
was $38.8 million compared with $0.5 million used in investing activities in the
prior year period. For the six months ended June 30, 2022, the $38.8 million
cash used in investing activities was the result of $37.4 million cash used for
the acquisitions, see Note 14, and $1.4 million for the acquisition of property
and equipment. In the prior year period, cash flow of $0.5 million used in
investing activities was the result of $1.0 million used for the acquisition of
property and equipment, offset by proceeds from the disposal of assets held for
sale of $0.5 million.

Financing Activities

For the six months ended June 30, 2022, $26.7 million was provided by financing
activities compared with $6.4 million used in financing activities in the prior
year period, an increase of $33.1 million. For the six months ended June 30,
2022, the Company used $4.3 million to repurchase common stock, $0.9 million in
non-controlling interest distributions, and received $0.1 million from proceeds
from employee stock purchase plan and exercise of stock options. Additionally,
for the first six months ended June 30, 2022, the Company used $22.7 million for
net borrowings on the Company's revolving credit lines, primarily used to
finance current year acquisitions, and $1.5 million in repayment on long-term
debt. In the prior year period, the Company used $4.1 million for repayments on
the Company's revolving credit line, $1.3 million in repayments on long-term
debt, and $0.8 million to make earnout payments.

Significant Accounting Policies and Estimates

Management's discussion and analysis of the Company's financial condition and
results of operations are based upon the Company's condensed consolidated
financial statements. The preparation of these financial statements requires
management to make estimates and assumptions about future events. These
estimates and the underlying assumptions affect the amounts of assets and
liabilities reported, disclosures about contingent assets and liabilities and
reported amounts of revenues and expenses. Such estimates include revenue
recognition, the valuation of trade receivables, inventories, goodwill,
intangible assets, other long-lived assets, legal contingencies, guarantee
obligations and assumptions used in the calculation of income taxes, assumptions
used in business combination accounting and related balances, and pension and
post-retirement benefits, among others. These estimates and assumptions are
based on management's best estimates and judgment. Management evaluates its
estimates and assumptions on an ongoing basis using historical experience and
other factors. Management monitors economic conditions and other factors and
will adjust such estimates and assumptions when facts and circumstances dictate.
As future events and their effects cannot be determined with precision, actual
results could differ significantly from these estimates.

Management believes there have been no changes during the six-month period ended
June 30, 2022, other than as disclosed in Note 2 to the condensed consolidated
financial statements within Item 1 of this quarterly Report on Form 10-Q, 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, 2021.

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, 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 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 "Part I - Item 1A. Risk Factors" of the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and
include, but are not limited to:

the sensitivity of our business to economic and financial conditions in the market generally and to economic conditions in CECO’s service areas;

                                       24
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the reliance on fixed-price contracts and the risks associated therewith, including actual costs exceeding estimates and method of revenue recognition;

the effect of growth on CECO’s existing infrastructure, resources and sales;

the ability to expand operations in new and existing markets;

the potential for contract delay or cancellation due to ongoing or escalating supply chain issues;

the impact of employee cost inflation and labor shortages;

liabilities arising from defective services or products which could give rise to material professional or product liability, warranty or other claims;

changes or developments regarding any litigation or investigation;

failure to meet timely completion or performance standards, which could result in increased costs and reduced profits or, in some cases, losses on projects;

the potential for price fluctuations of manufactured components and raw materials, including due to tariffs and surcharges;

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;

the impact of federal, state or local regulations;

our ability to redeem our common stock and the amounts and timing of redemptions, if any;

general economic and political conditions;

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

our ability to successfully integrate acquired businesses and realize the synergies of strategic transactions; and

unpredictability and severity of catastrophic events, including cyber security
threats, acts of terrorism or outbreak of war or hostilities or public health
crises, such as uncertainties regarding the extent and duration of impacts of
matters associated with COVID-19, as well as management's response to any of the
aforementioned factors.

Many of these risks are beyond management's ability to control or predict.
Should one or more of these risks or uncertainties materialize, or should the
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. Furthermore, forward-looking statements speak only
as of the date they are made. Except as required under the federal securities
laws or the rules and regulations of the Securities and Exchange Commission, we
undertake no obligation to update or review any forward-looking statements,
whether as a result of new information, future events or otherwise.

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