The reduced activity levels, continued significant cost overruns on primarily six projects, four of which were from the same office, and excess administrative overhead costs have resulted in continuing losses for the division. Management has been replaced in several of the Division's offices, and the Division is focused on completing projects as expeditiously as possible while reducing overhead. Headcount in the division has been reduced by 15% from last year.
The backlog in the Heavy Civil Division was $309.4 million as of July 31, 2012, compared to $297.4 million as of April 30, 2012, and $244.6 million as of July 31, 2011.
|Geoconstruction Division||Three Months||Six Months|
|Ended July 31,||Ended July 31,|
|Revenues||$ 35,187||$ 23,290||$ 59,392||$ 43,114|
|Income before remeasurement of equity investment||4,908||4,477||7,089||4,906|
|Loss on remeasurement of equity investment||(7,705)||--||(7,705)||--|
|Income (loss) before income taxes||(2,797)||4,477||(616)||4,906|
|Equity in earnings of affiliate, included in above earnings||1,556||799||3,488||925|
On May 30, 2012, the Division acquired the remaining 50% of Diberil Sociedad Anonima, ("Diberil") a Uruguayan company and parent company to Costa Fortuna (Brazil and Uruguay). The results of Diberil are reported on a consolidated basis from that date, rather than on an equity basis as had been done previously. This resulted in revenue of $5.1 million being recorded in Q2 FY2013.