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Aegion Corporation Reports Third Quarter 2013 Non-GAAP Diluted Earnings Per Share From Continuing Operations Of $0.44

Stocks in this article: AEGN

Contract backlog in our North American Water and Wastewater segment at September 30, 2013 was a record $241.7 million, a $20.6 million, or 9.3 percent, increase from backlog at June 30, 2013 and a $74.4 million, or 44.5 percent, increase from backlog at September 30, 2012. This segment won multiple large projects during the quarter in the Midwest and West regions of the United States. We expect backlog in Canada to remain steady in the coming quarters due to seasonality, while domestic market activity is expected to remain favorable for the remainder of 2013 and into 2014.

Contract backlog in our International Water and Wastewater segment was $43.0 million at September 30, 2013. This represented a decrease of $1.1 million, or 2.5 percent, compared to June 30, 2013 and a decrease of $12.6 million, or 22.7 percent, compared to September 30, 2012. These decreases were primarily due to current year production in Spain, the Netherlands and Malaysia. We have a number of large near-term bidding opportunities in key markets in Asia. We believe our opportunities for profitable growth are significant if we are successful on these bids.

Contract backlog in our Commercial and Structural segment was $48.2 million at September 30, 2013. This represented a decrease of $4.0 million, or 7.7 percent, compared to June 30, 2013 and an increase of $1.5 million, or 3.2 percent, compared to September 30, 2012. Backlog has been slower to develop in North America than we anticipated. However, a growing bid table from investments made to enhance sales growth holds the promise of a recovery over the near term. In Asia, backlog decreased slightly due to current projects, especially large projects in Hong Kong and Singapore, and reflects delays receiving final awards for new projects in other countries in Asia.

Segment Reporting

Energy and Mining

  Quarters Ended September 30,       Increase (Decrease)
2013   2012 $   %
Revenues $ 168,708   $ 137,386 $ 31,322   22.8 %
Gross profit 37,118 33,710 3,408 10.1
Gross profit margin 22.0 % 24.5 % n/a (250)bp
Operating expenses 24,821 19,176 5,645 29.4
Earnout reversal (2,844 ) (6,892 ) (4,048 ) (58.7 )
Acquisition-related expenses 2,267 2,267 n/m
Operating income 12,874 21,426 (8,552 ) (39.9 )
Operating margin 7.6 % 15.6 % n/a (800)bp
Non-GAAP operating income 15,141 21,426 (6,285 ) (29.3 )
Nine Months Ended September 30, Increase (Decrease)
2013   2012 $   %
Revenues $ 385,991 $ 377,610 $ 8,381 2.2 %
Gross profit 87,678 93,466 (5,788 ) (6.2 )
Gross profit margin 22.7 % 24.8 % n/a (210)bp
Operating expenses 61,866 57,456 4,410 7.7
Earnout reversal (2,844 ) (6,892 ) (4,048 ) (58.7 )
Acquisition-related expenses 4,175 4,175 n/m
Operating income 24,481 42,902 (18,421 ) (42.9 )
Operating margin 6.3 % 11.4 % n/a (510)bp
Non-GAAP operating income 28,656 42,902 (14,246 ) (33.2 )

Third Quarter 2013 versus Third Quarter 2012

Excluding acquisition-related expenses, Energy and Mining operating income decreased $6.3 million to $15.1 million, due principally to a lack of project activity available in the market for our Bayou operations in New Iberia, Louisiana, a decline in market conditions in many of the international markets for United Pipeline Systems, notably the mining sector, and significantly lower operating income from the large phosphate lining project in Morocco as this project nears completion. Offsetting the reported decline in operating income was Brinderson’s contribution of $2.6 million in operating income. In addition, revenues and profits were recognized in the third quarter of 2013 from the start of the Wasit gas field project in Saudi Arabia for our CRTS robotic coating operations, although below our plan because of another delay in the offshore production schedule.

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