Contract backlog in our European Sewer and Water Rehabilitation segment at September 30, 2011 decreased $3.0 million, or 13.5 percent, compared to June 30, 2011 and decreased $6.8 million, or 26.2 percent, compared to September 30, 2010. Backlog has improved in France, while market conditions and increased competition have negatively impacted backlog in the Netherlands.

       

Asia-Pacific Sewer and Water Rehabilitation Segment
Increase (Decrease)
(in thousands, except %) 2011     2010 $   %
Three Months Ended September 30,
Revenues $ 11,163 $ 9,215 $ 1,948 21.1 %
Gross profit 1,915 2,646 (731 ) (27.6 )
Gross margin

17.2

%
28.7 % n/a (11.5 )
Operating expenses 2,088 2,351 (263 ) (11.2 )
Restructuring charges 173 173 n/m
Operating income (loss)

(346

)
295 (641 ) (217.3 )
Operating margin

(3.1

)%
3.2 % n/a (6.3 )
 
Nine Months Ended September 30,
Revenues $ 35,103 $ 33,390 $ 1,713 5.1 %
Gross profit 5,970 7,727 (1,757 ) (22.7 )
Gross margin

17.0

%
23.1 % n/a (6.1 )
Operating expenses 6,662 7,384 (722 ) (9.8 )
Restructuring charges 173 173 n/m
Operating income (loss)

(865

)
343 (1,208 ) (352.2 )
Operating margin

(2.5

)%
1.0 % n/a (3.5 )
 
  September 30, 2011   June 30, 2011   March 31, 2011   December 31, 2010   September 30, 2010
Backlog (in millions) $37.4   $50.3   $68.7   $79.8   $81.3

In the third quarter of 2011, our Asia-Pacific Sewer and Water Rehabilitation segment operating income decreased by $0.6 million, compared to the third quarter of 2010. The decrease was primarily due to the lack of profitable projects in India, partially offset by continued growth in our Australian operation. Operating expenses decreased by $0.3 million for the quarter compared to the prior year; however, operating income was also negatively impacted by $0.2 million as part of the Company’s restructuring efforts.

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