Aegion Corporation, Successor To Insituform Technologies, Inc., Reports Third Quarter 2011 Results:
“We implemented a $2.2 million restructuring program in the third quarter to restructure our North American Sewer and Water Rehabilitation business and streamline costs in our other segments and corporate support functions. We anticipate that the restructuring will generate approximate pre-tax savings of $1.8 - $2.0 million in the fourth quarter of 2011 and annualized pre-tax savings of $8.0 - $9.0 million in 2012. We’ve taken the necessary steps to reposition our North American Sewer and Water Rehabilitation business to successfully operate in the current challenging market environment where small diameter pipe work is exceeding 85 percent of our project mix, the average transaction amount is considerably smaller and we are executing a record level of these smaller transactions,” said Burgess. “Those actions included a reduction in crews, as well as direct and corporate overhead, implementation of a more disciplined bidding process and investment in project management and logistics to improve efficiency. We achieved increased profitability in the third quarter, primarily as a result of a strong September, compared to previous quarters this year and I expect we will build momentum of profitable growth in the coming quarters.”
With regards to our Energy and Mining segment, Burgess stated, “Our coatings businesses were impacted by not winning a large Canadian insulation lining contract and delay in pipe delivery for a large pipe lining project at our New Iberia facility during the third quarter. This obviously impacted the Energy and Mining segment’s financial results at the gross profit and operating profit lines, overshadowing record results from United Pipeline Systems and continued steady performance from Corrpro. The outlook for our Energy and Mining segment is promising as our backlog of pipe coating projects is improving because of a return of off shore projects in the Gulf of Mexico and due to our efforts to expand our Energy and Mining group’s footprint in the Middle East and North Africa. We already have $20 million in backlog in our pipe coating business and there is a clear line of site for an additional $20 million in the coming months. We closed the quarter with record backlog for the entire segment, and our pace of project acquisitions is increasing. Of course, we also recently announced the largest project in United Pipeline Systems’ history with a $67.3 million joint venture project in Morocco.”
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