Aegion Corporation (Nasdaq Global Select Market: AEGN) today reported financial results for the second quarter and first six months of 2013. Excluding one-time items defined as non-GAAP
, second quarter 2013 net income from continuing operations totaled $13.3 million, or $0.34 per diluted share, compared to $13.2 million, or $0.33 per diluted share in the prior year quarter. On a non-GAAP basis, net income from continuing operations for the first six months of 2013 was $16.9 million, or $0.43 per diluted share, compared to income from continuing operations of $20.6 million, or $0.52 per diluted share, in the first half of 2012.
The second quarter 2013 financial results also include an unusually large $1.6 million, or $0.03 per diluted share, non-cash unrealized loss from foreign currency fluctuations on dollar denominated foreign subsidiary loans and payables.
J. Joseph Burgess, Aegion’s President and Chief Executive Officer, commented, “Obviously, there were a number of impacts to the second quarter that created noise around our results, including the gain on the sale of our German joint venture, expenses related to the Brinderson acquisition, the non-cash write-down of our investment in Bayou Coatings, unrealized losses on foreign currency movements and the discontinued operations of Bayou Welding Works. Additionally, customer driven project deferrals and weather-related lost production days in the second quarter and the first half dampened our first half operating performance. However, we have the backlog in hand, especially from North American Water and Wastewater and Corrpro, and overall market strength in key businesses that give us confidence for significant improvement in earnings, cash flow and return on invested capital in the second half of 2013, consistent with our modestly reduced full year guidance.”
2013 Second Half and Full-Year Outlook
Energy and Mining enters the second half of the year with backlog and momentum in key markets. Corrpro finished the first half of 2013 on track to meet its 2013 operating income plan, with operating margins in the range of 12 to 13 percent and with revenue growth expected to be at or near 10 percent. Corrpro’s backlog on June 30, 2013 was a near-record $82 million as the company enters its peak season. UPS expects continued strong performance in North America and the Middle East, but faces a slowdown in mining-related lining activity in South America and from energy-related lining projects in Mexico. The anticipated third-quarter completion of UPS’ $65 million Morocco project creates a gap in backlog that will take time to fill. CRTS received final notice for an early August start on the primary pipe weld coating activities for both the offshore and onshore portions of the $27 million Wasit project. The Wasit project has experienced significant delays since the original June 1, 2012 start date. This project is expected to be a key contributor to second-half earnings. The previously cited lull in Gulf of Mexico activity and its impact on our Bayou coating facilities in New Iberia, Louisiana appear to be subsiding. Bayou is actively bidding offshore projects scheduled to begin in 2014. The outlook for Bayou in Canada remains favorable as the pipeline construction season begins this fall. Full-year revenues for our Energy and Mining segment are likely to increase 15 to 20 percent in 2013, compared to prior guidance of 20 to 25 percent growth. This includes contributions from the Brinderson, LP acquisition, which is expected to be included in Energy and Mining and begin reporting financial results in the third quarter. Operating margins for our Energy & Mining segment are forecasted to be in the range of 9 to 10 percent.