CECO Environmental Corp. (NASDAQ:CECO) has announced a change in its auditor, with Deloitte & Touche LLP set to take over from BDO USA, P.C., effective February 28, 2025. The decision was made by the Audit Committee of the Board of Directors and marks a significant shift in the company’s financial oversight.

The previous auditor, BDO, had issued reports on CECO’s financial statements for the years ending December 31, 2024, and December 31, 2023, without any adverse opinions or modifications. There were no disagreements between CECO and BDO on accounting principles, practices, financial statement disclosures, or auditing scope that would have required mention in BDO’s reports for those years.

CECO had identified material weaknesses in its internal control over financial reporting as of December 31, 2023. These weaknesses pertained to management’s review of revenue recognition for contracts and balance sheet reconciliations. Remediation efforts were subsequently implemented, and by June 30, 2024, the company reported that these material weaknesses had been addressed successfully. InvestingPro analysis shows the company maintains a FAIR financial health score of 2.16, with particularly strong marks in growth potential. Subscribers can access 8 additional ProTips and comprehensive financial health metrics through the Pro Research Report.

This change in the certifying accountant is part of CECO’s ongoing efforts to strengthen its financial reporting processes. The Audit Committee has discussed the previously reported material weaknesses with both BDO and Deloitte, ensuring a smooth transition.

Deloitte’s engagement as CECO’s new independent registered public accounting firm for the fiscal year ending December 31, 2025, was confirmed on March 5, 2025. Prior to this engagement, CECO had not consulted Deloitte on any accounting principles or reporting issues that might have influenced the company’s decision-making.

CECO has provided BDO with a copy of the Current Report on Form 8-K before filing it with the SEC and has included BDO’s response to the SEC, dated March 3, 2025, as an exhibit to the report. This move is expected to provide fresh perspectives on the company’s financial reporting and enhance the robustness of its financial controls. Despite recent stock price weakness, with shares down 18% year-to-date, InvestingPro analysis indicates analysts expect both sales and net income growth in the current year. The company currently trades at a P E ratio of 65.9, suggesting a premium valuation relative to peers.

Investors and stakeholders can find further details in the exhibits attached to CECO’s Current Report on Form 8-K, which is based on a press release statement.

In other recent news, CECO Environmental Corp. announced a reduction in its full-year 2024 revenue guidance due to customer-driven project delays, impacting its Q4 revenue and EBITDA. The company now expects revenues between $555 to $558 million, down from the previous forecast of $575 to $600 million, with adjusted EBITDA projected between $62 to $63 million. Despite this setback, CECO achieved over $210 million in Q4 bookings, marking a new record and the highest-ever backlog levels for the company. Additionally, CECO completed the acquisition of Verantis Environmental Solutions Group and plans to divest its Fluid Handling business by late Q1 2025, using the proceeds to reduce debt and support future growth investments.

Craig-Hallum analyst Aaron Spychalla recently increased the price target for CECO Environmental to $40 from $34, maintaining a Buy rating. This adjustment follows CECO’s acquisition of Profire Energy (NASDAQ:PFIE) for $123 million, a move expected to enhance margins and align with its strategic focus on the Energy Transition sector. Spychalla anticipates potential synergies from the acquisition and notes the company’s strong prospects for future orders, driven by emissions solutions in power generation. Furthermore, CECO’s management highlighted potential growth in its nuclear segment, which could significantly expand in the coming years as nuclear power gains traction.

CECO Environmental appoints Deloitte as new auditor

CECO Environmental Corp. (NASDAQ: CECO) announced the appointment of Deloitte & Touche LLP as its new auditor, effective February 28, 2025, replacing BDO USA, P.C. The decision was made by the Audit Committee of the Board of Directors. The transition aims to strengthen the company’s financial reporting processes, following previously reported material weaknesses in internal control over financial reporting. Despite recent stock price weakness, analysts expect sales and net income growth in the current year, with the company trading at a P/E ratio of 65.9. CECO also announced a reduction in full-year 2024 revenue guidance due to project delays, and completed the acquisition of Verantis Environmental Solutions Group, planning to divest its Fluid Handling business by late Q1 2025. Craig-Hallum analyst Aaron Spychalla increased the price target for CECO Environmental to $40 from $34, maintaining a Buy rating, following the acquisition of Profire Energy for $123 million.