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8-K - FORM 8-K DATED FEBRUARY 25, 2010 - Aegion Corp | form8k02252010.htm |
EX-99.2 - CONFERENCE CALL TRANSCRIPT OF FEBRUARY 26, 2010 - Aegion Corp | ex99210262010.htm |
Exhibit 99.1
INSITUFORM
TECHNOLOGIES, INC. REPORTS RECORD FOURTH QUARTER 2009 NET INCOME:
·
|
Income
from continuing operations for the fourth quarter, excluding restructuring
charges and acquisition-related expenses, was $15.8 million (non-GAAP), a
52.9 percent increase from fourth quarter 2008 of $10.3
million
|
·
|
Income
from continuing operations, excluding restructuring charges and
acquisition-related expenses, on a per diluted share basis was $0.41
(non-GAAP) for the quarter, as compared to $0.37 per diluted share in the
fourth quarter of 2008
|
·
|
Full
year 2009 income from continuing operations, excluding restructuring
charges and acquisition-related expenses, was $38.9 million, or $1.04 per
diluted share (non-GAAP), versus $24.1 million, or $0.86 per diluted
share, for the full year of 2008
|
·
|
Fourth
quarter pre-tax charges of $5.5 million ($4.0 million after-tax, or $0.10
per diluted share) were recorded related to previously announced
reorganization of European operation, along with costs related to the
closure of Corrpro Companies’ paint team operation and transaction costs
associated with recent acquisitions
|
·
|
Total
contract backlog remained near historical high at $463.4 million relating
to strong backlog in North American Sewer Rehabilitation and fourth
quarter 2009 growth in Energy and
Mining
|
·
|
2010
expected to be strongest in history of Insituform, on continued momentum
in every business unit. 2010 earnings per diluted share
expected to be in range of $1.45 and
$1.55
|
Chesterfield, MO – February 25, 2010
– Insituform Technologies, Inc. (Nasdaq Global Select Market: INSU) today
reported fourth quarter income from continuing operations, excluding
restructuring charges and acquisition-related expenses, of $15.8 million ($0.41
per diluted share) (non-GAAP), representing a 52.9 percent increase from the
fourth quarter of 2008, when income from continuing operations was $10.3 million
($0.37 per diluted share).
The
fourth quarter 2009 results were impacted by restructuring charges and
acquisition-related expenses of $5.5 million ($4.0 million after-tax, or $.10
per diluted share), approximately $4.6 million of which was related to the
recently announced reorganization of our European Sewer Rehabilitation
operation. The restructuring charge was comprised of severance, lease
termination, asset impairment and legal costs associated with exiting low-return
geographies, combining operations and realigning responsibilities and functions
in our European headquarters office. We anticipate annualized cost
savings of approximately $3.2 million as a result of this
reorganization. In addition, during the fourth quarter, we made the
decision to close the Corrpro Companies, Inc. (“Corrpro”) paint team operation,
which painted U.S Navy ships. This operation was non-core to
Corrpro’s other operations. The amount of the pre-tax closure charge
was approximately $0.7 million and primarily consisted of severance and asset
impairment costs. Approximately $0.3 million in transaction expenses
was incurred during the fourth quarter in connection with our acquisition of a
51 percent interest in Bayou Perma-Pipe Canada, Ltd. and its acquisition of
certain pipe coating assets of Garneau, Inc., which transactions closed in
October 2009, and the acquisition of our licensee in Singapore, which closed in
January 2010.
For the
fourth quarter of 2009, income from continuing operations, inclusive of
restructuring charges and acquisition-related expenses, was $11.8 million, or
$0.31 per diluted share, as compared to $10.3 million, or $0.37 per diluted
share, in the fourth quarter of 2008.
For the
full year of 2009, income from continuing operations, inclusive of restructuring
charges and acquisition-related expenses, was $30.2 million, or $0.81 per
diluted share, compared to $24.1 million, or $0.86 per diluted share, for the
full year of 2008. Excluding pre-tax $12.1 million ($8.7 million
after-tax) of restructuring charges and acquisition-related expenses, income
from continuing operations for the full year of 2009 would have been $38.9
million, or $1.04 per diluted share (non-GAAP).
The
fourth quarter 2008 results were favorably impacted by a pre-tax $8.5 million
settlement ($6.7 million net of legal and related costs) of a litigation matter
with a former European licensee of the Insituform®
process. Offsetting this favorable impact were approximately $1.3
million in costs associated with a reduction in force during the quarter in
connection with a restructuring of our North American and European operations
and certain corporate support functions. If these items were
excluded, the Company would have reported income from continuing operations of
$0.23 per diluted share for the fourth quarter of 2008, and $0.72 per diluted
share for the full year of 2008 (non-GAAP). Excluding the impacts of
non-recurring items and acquisition-related expenses in 2009 and 2008, the
improvement in income from continuing operations per diluted share in the fourth
quarter was 78.3 percent, and in the full year was 44.4 percent
(non-GAAP).
In the
fourth quarter of 2009, discontinued operations reported a net loss of $0.1
million. There were no material matters open with respect to
discontinued operations as of December 31, 2009, and no material costs are
anticipated in the future.
Fourth
quarter net income was $11.7 million, or $0.30 per diluted
share. This compares to $9.7 million, or $0.34 per diluted share, for
the fourth quarter of 2008. For the full year of 2009, net income was
$26.2 million, or $0.70 per diluted share, compared to net income of $21.6
million, or $0.77 per diluted share, for the full year of
2008. Excluding pre-tax $12.1 million ($8.7 million after-tax) of
restructuring charges and acquisition-related expenses, net income would have
been $34.9 million, or $0.93 per diluted share (non-GAAP), for the full year of
2009.
Joe
Burgess, President and Chief Executive Officer, commented, “Despite some extreme
weather impacts and lower than expected contributions from Bayou, we were able
to deliver one of the strongest quarters of earnings in Insituform’s
history. Excluding restructuring charges and acquisition-related
expenses, we delivered $0.41 per diluted share from continuing
operations. For the year and excluding the same charges, we achieved
$1.04 per diluted share, which is in line with our stated guidance from the
beginning of the year. We were able to achieve these strong results
due to tremendous performance from our North American Sewer Rehabilitation
operation, where gross profit margins topped 27.7 percent, the strongest in many
years for this business. We also experienced stronger performance
from our European Sewer Rehabilitation operation, and improved contributions
from Asia-Pacific Sewer Rehabilitation, and portions of our Energy and Mining
segment.”
“Our
North American Sewer Rehabilitation business has great momentum heading into
2010. Gross profit margins have been steadily climbing due partially
to lower resin and fuel costs, but improved project execution and increased
manufacturing efficiencies have led the way. For the full year of 2009, North
American Sewer Rehabilitation gross profit margin was above 25 percent for the
first time in five years. Due to continued cost optimization efforts,
operating margins topped 10.8 percent for the year, and were 13.1 percent for
the fourth quarter of 2009. While backlog at December 31, 2009 was
slightly below the record level from earlier in 2009, our bid table remains very
robust, and we maintained virtually the same level of backlog as the third
quarter, in a period typically down in the market. We expect to see
growth in the North American sewer market in 2010, as State budgets recover and
stimulus dollars get funneled into the system. We also believe that
we can continue recent trends in operating margin expansion as a result of
growth, cost control and improved project execution.”
“Our
European Sewer Rehabilitation segment had its best quarter of the year in terms
of revenues and profitability, excluding the restructuring charge. As
we announced in December 2009, we have enacted measures to put our European
business on track to achieve stronger financial returns
immediately. We head into 2010 with strong backlog, and our prospects
for growth in our realigned operating geographies, coupled with a focused
strategy to sell tube to third parties throughout Europe, are very
robust.”
“In
Asia-Pacific, our revenues grew nicely as we began to see more throughput in
India, coupled with growth in Australia and Hong Kong. While our
margin performance was not as strong as we would have liked in India for the
quarter due to delays experienced on certain projects, we continued to improve
our operating capability in the region. With significant projects in
Australia and Hong Kong, continued growth in India and our acquisition in
January 2010 of our former Singapore licensee, we expect to maintain our growth
momentum in 2010, and this business unit should deliver significant gains in
year over year profits for our Company.”
“Our
Water Rehabilitation segment experienced a small operating loss for the fourth
quarter, but that does not tell the whole story for this business. We
made significant progress with respect to gaining market acceptance of
InsituMain™ with a number of pilot projects performed during the quarter. We
have gained momentum in the U.S marketplace, and we believe this business will
make meaningful progress in 2010.”
“I am
very pleased with the progress shown by our Energy and Mining business,
particularly in terms of backlog growth. At year-end 2009, we had
record backlog in our United Pipeline Systems division of $57.3 million, and
Bayou’s and Corrpro’s backlog remained steady, totaling $122.9
million. The fourth quarter results for our Energy and Mining segment
were improved as well, with Corrpro and United Pipeline Systems delivering their
strongest results of the year. Bayou also showed its best performance
of the year, even though the financial results were negatively impacted by
slower than anticipated production in pipe coatings, resulting from some
isolated steel pipe issues. We have shed excess costs across the
entire energy and mining platform, and we have completed virtually all of our
integration activities. Even more important, we have solidified our
management structure to manage this business as an integrated platform going
into the new-year, which should enable us to take advantage of improving market
conditions and larger-scale global opportunities and to market our full product
and service offering to the energy and mining sector.”
“We made
significant progress in 2009 in regard to establishing Insituform as a stronger
and more consistently performing company. As we finished 2009 with
one of our strongest fourth quarters on record, we also have very solid backlog
in each of our business units and solid momentum in the markets we
serve. We have a focused management team that believes that 2010 will
be the best in Insituform’s history. We anticipate that we will
deliver between $1.45 and $1.55 in earnings per diluted share for the full year
of 2010. We are excited about our prospects and the potential for
Insituform to deliver strong financial results.”
Consolidated
revenues in the fourth quarter of 2009 were $213.8 million, a 55.8 percent
increase over the fourth quarter of 2008. Fourth quarter 2009
revenues included $21.2 million and $47.1 million in revenues from The Bayou
Companies, Inc. (Bayou) and Corrpro, respectively. Excluding Bayou
and Corrpro revenues, consolidated revenues for the fourth quarter of 2009 would
have been $145.5 million (non-GAAP), an $8.2 million, or 6.0 percent, increase
from fourth quarter 2008 revenues. This increase was primarily due to
growth in our Asia-Pacific Sewer Rehabilitation and North American Sewer
Rehabilitation segments, partially offset by lower revenues in our European
Sewer Rehabilitation and Water Rehabilitation segments. Revenues in
our Asia-Pacific Sewer Rehabilitation segment increased $6.4 million, or 137.7
percent, compared to the fourth quarter 2008, primarily as a result of increased
activity in India, along with the inclusion of revenues from our Hong Kong and
Australia operations, as a result of the June 2009 acquisitions of the remaining
50 percent interest in these operations. Revenues in our North
American Sewer Rehabilitation segment increased by $12.6 million, or 15.2
percent, compared to the fourth quarter of 2008, primarily as a result of
increased workable backlog in the fourth quarter of 2009. Third-party
product sales in our North American Sewer Rehabilitation segment were $2.5
million in the fourth quarter of 2009, compared to $3.4 million in the fourth
quarter of 2008. Revenues in 2008 included a significant order
with respect to one large project. Revenues in our European Sewer
Rehabilitation segment declined $9.0 million, or 27.3 percent, quarter over
quarter. This decrease was primarily reflective of continued market weakness in
the United Kingdom. In addition, we recorded $8.0 million in revenues
for a litigation settlement in the fourth quarter of 2008. Our Water
Rehabilitation segment revenues decreased by $0.9 million, or 25.0 percent, for
the fourth quarter of 2009, compared to the prior year quarter, due to lower
levels of workable backlog as we continue the rollout of our InsituMain™ product
line through pilot testing. Energy and Mining segment revenues,
exclusive of the impact of Bayou and Corrpro, declined $0.8 million, or 6.4
percent, from the fourth quarter of 2008, due principally to lower revenues in
United Pipeline System’s Chilean operation, along with decreased activity in
other international markets.
Consolidated
gross profit for the fourth quarter of 2009 totaled $58.9 million, an increase
of $19.5 million, or 49.6 percent from the same period in 2008. This
amount included $4.4 million and $14.4 million in gross profit contributed by
Bayou and Corrpro, respectively, in the fourth quarter of
2009. Excluding the impact of Bayou and Corrpro, gross profit was
$40.1 million (non-GAAP), which represented an increase of $0.7 million, or 1.9
percent, compared to the prior year quarter, notwithstanding revenue declines in
our United Pipeline System business and our European Sewer Rehabilitation
segment. Gross profit margins in our North American Sewer
Rehabilitation segment increased to 27.7 percent in the fourth quarter of 2009,
compared to 23.0 percent in the fourth quarter of 2008. This dramatic
increase was attributable to improved contracting execution and manufacturing
efficiencies, along with continued lower resin and fuel costs. In
addition, gross profit margins were positively impacted by approximately $1.5
million due to favorable casualty self-insurance accruals as a result of recent
safety performance. Our European Sewer Rehabilitation segment
experienced a decrease in gross profit margin rates year over year primarily due
to the impact of the $8.0 million litigation settlement on prior year
margins. However, this performance was the strongest of any quarter
in 2009, due to solid performance by our U.K. manufacturing operation and our
contracting operations in The Netherlands and Switzerland. Gross
profit in our Asia-Pacific Sewer Rehabilitation segment increased substantially,
principally as a result of the increase in revenues. Gross profit
margins in our Asia-Pacific Sewer Rehabilitation segment decreased primarily due
to lower performance in India due to project delays, which caused cost
inefficiencies. Gross profit in our Water Rehabilitation segment
increased by $0.2 million, even though revenues declined in the fourth quarter
of 2009 compared to the fourth quarter of 2008. This was primarily
due to project performance issues experienced in 2008 on several projects in the
United Kingdom. Gross profit in our Energy and Mining segment,
excluding the impact of the acquisitions of Bayou and Corrpro, improved by $0.6
million (non-GAAP) in the fourth quarter of 2009 from one year
ago. During the fourth quarter of 2009, Bayou had its
best quarter of the year, as a result of increased revenue from its pipe coating
operations. However, revenues and profitability suffered as a result
of slower than planned production caused by certain isolated pipe non-conformity
issues. Bayou contributed $4.4 million in gross profit during the
fourth quarter of 2009. Total gross profit for Corrpro during the
fourth quarter of 2009 was $14.4 million, and Corrpro’s gross profit margin was
strong at 30.5 percent.
Consolidated
operating expenses for the fourth quarter of 2009 were $41.0 million and
included $5.5 million (non-GAAP) of restructuring charges and
acquisition-related expenses. This was $15.8 million higher than the
operating expenses incurred in the fourth quarter of 2008. Excluding
the $5.5 million of restructuring charges and acquisition-related expenses,
operating expenses would have been $35.5 million (non-GAAP), which is $10.3
million higher than the same period last year. Operating expenses in
the fourth quarter of 2009 included $3.9 million and $8.9 million in operating
expenses for Bayou and Corrpro, respectively. Bayou’s and Corrpro’s
operating expenses were $0.9 million lower than the third quarter of 2009,
primarily as a result of cost reduction initiatives implemented during the
second and third quarters of 2009. Consolidated operating expenses in
the fourth quarter of 2009, excluding the impacts of the restructuring charges
and acquisition-related expenses and the operating expenses of Bayou and
Corrpro, decreased by $2.5 million, or 9.9 percent, to $22.7 million compared to
the fourth quarter of 2008 (non-GAAP). This decrease was primarily
the result of cost reduction measures implemented in our North American Sewer
Rehabilitation and European Sewer Rehabilitation operations in late 2008 and
during 2009, as well as the fact that 2008 operating expenses included $1.3
million of non-recurring expense related to the litigation
settlement.
Consolidated
operating income in the fourth quarter of 2009 was $17.9
million. Excluding the restructuring charges and acquisition-related
expenses and the results of Bayou and Corrpro, consolidated operating income
(non-GAAP) was $17.4 million, a $3.2 million, or 23.0 percent, increase from the
fourth quarter of 2008.
For the
full year of 2009, consolidated revenues increased $190.2 million, or 35.4
percent, to $726.9 million from $536.7 million during the full year of
2008. Gross profit increased $61.0 million, or 47.1 percent, to
$190.6 million compared to the prior year. Gross profit was primarily
impacted by the addition of Corrpro and Bayou as well as the significant
improvement in gross profit margins in our North American Sewer Rehabilitation
segment due to improved project execution, manufacturing efficiencies and lower
resin and fuel costs. Gross profit and margins were also boosted by
increased third-party product sales in North America. Gross profit in
our Asia-Pacific Sewer Rehabilitation segment increased substantially,
principally as a result of the increase in revenues in India. Gross
profit in our Water Rehabilitation segment decreased by $1.5 million, primarily
due to project performance issues on several projects that were completed during
the year. Gross profit in our Energy and Mining segment, excluding
the impact of the acquisitions of Bayou and Corrpro, dropped by $3.8 million
(non-GAAP) in 2009 from 2008, primarily due to the decline in revenues in our
United Pipeline Systems business. However, United Pipeline Systems’
gross profit margins improved to 34.2 percent in 2009 versus 30.1 percent in
2008, due primarily to favorable project execution in
Canada. Operating expenses increased $45.8 million, or 47.8 percent,
to $141.5 million in 2009 compared to 2008. This increase in
operating expenses included $5.2 million (non-GAAP) of restructuring charges and
$6.9 million of acquisition-related expenses. In addition, 2009
operating expenses included $12.0 million and $29.3 million in operating
expenses for Bayou and Corrpro, respectively. Consolidated operating
expenses in 2009, excluding the impacts of the restructuring charges and
acquisition-related expenses and the operating expenses of Bayou and Corrpro,
decreased by $7.7 million, or 8.0 percent, to $95.7 million compared to 2008
(non-GAAP) . This decrease was primarily the result of the previously
discussed cost reduction measures implemented in our North American Sewer
Rehabilitation and European Sewer Rehabilitation operations. These
cost reduction efforts were partially offset by operating expense growth in our
Asia-Pacific Sewer Rehabilitation segment due to ongoing growth
initiatives. Also, operating expenses for 2008 included approximately
$1.7 million in expenses related to a proxy contest. As a result of
the foregoing, consolidated operating income increased $15.2 million, or 45.0
percent, to $49.1 million for 2009 compared to the prior year.
Excluding
restructuring charges and acquisition-related expenses, income from continuing
operations increased in 2009 by $14.9 million, or 61.7 percent, to $38.9
million, or $1.04 per diluted share (non-GAAP), from $24.1 million, or $0.86 per
diluted share in 2008.
Total
contract backlog decreased slightly to $463.4 million at December 31, 2009
compared to $467.7 million at September 30, 2009.
Contract
backlog in our North American Sewer Rehabilitation segment at December 31, 2009
was $180.9 million, representing a decrease of $2.9 million, or 1.6 percent,
compared to September 30, 2009. However, contract backlog increased
$30.1 million, or 20.0 percent, from December 31, 2008. Orders were
relatively strong during the fourth quarter of 2009, when market conditions for
bidding are traditionally slower.
Contract
backlog at December 31, 2009 in our European Sewer Rehabilitation segment
decreased by $3.5 million, or 8.6 percent, to $37.2 million compared to $40.7
million at September 30, 2009, and increased by $12.0 million, or 47.6 percent,
compared to $25.2 million at December 31, 2008. While down from
September 2009 levels, contract backlog in the segment remains at historic high
levels.
Contract
backlog in our Asia-Pacific Sewer Rehabilitation segment was $57.4 million at
December 31, 2009 compared to $84.5 million at September 30, 2009, and $46.2
million at December 31, 2008. The decrease in contract backlog from September
2009 was due primarily to the exclusion of two projects in India previously won,
but which are now being rebid by the customer. Backlog remains very
strong in Australia and Hong Kong after recent large project
wins. After year-end, the Company acquired its licensee in Singapore
and has been successful in securing approximately $18.5 million in contract
backlog. In addition, the Company has received approximately $3.1
million in third-party tube sale orders in Singapore. These contracts
and orders are not included in December 31, 2009 backlog.
Water
Rehabilitation contract backlog was $7.7 million at December 31, 2009, compared
to $7.5 million at September 30, 2009 and $8.2 million at December 31,
2008. During the fourth quarter of 2009, there was continued
progress with respect to establishing the InsituMain™ product in the
marketplace, through a number of pilot projects. There are a number
of new project orders, and additional pilot projects, that will be carried out
in the first half of 2010, and prospects for orders are increasing.
Our
Energy and Mining segment contract backlog was $180.2 million at December 31,
2009 compared to $151.2 million at September 30, 2009, a 19.2 percent
increase. Contract backlog for our United Pipeline Systems business
increased to $57.3 million at December 31, 2009, an increase of $29.9 million
from September 30, 2009, and $38.6 million from December 31,
2008. This increase was primarily due to recent wins in Mexico and
Australia, along with other incremental improvements in United Pipeline System’s
primary geographies of the United States, Canada and Chile. Contract
backlog for Bayou was $67.8 million at December 31, 2009, which was up from
$64.8 million at September 30, 2009, but down from $86.9 million at December 31,
2008 (prior to Company’s acquisition). Market conditions are
improving for all of Bayou’s primary businesses. Corrpro’s contract
backlog at December 31, 2009 was $55.1 million, down from $59.0 million at
September 30, 2009, and down from $70.5 million at December 31, 2008 (prior to
Company’s acquisition). The backlog numbers for Bayou and Corrpro as
of December 31, 2008 are not included in our Energy and Mining segment contract
backlog as of such date as we did not own the companies at that
date. Business prospects are very robust for the entire Energy and
Mining segment, and portions of the business that experienced significant
weakness in 2009, are showing modest market recovery.
Unrestricted
cash increased by $15.4 million, or 17.0 percent, in the fourth quarter of 2009
to $106.1 million from $90.7 million at September 30, 2009, principally as a
result of improved net income and enhanced working capital
management. Unrestricted cash also increased by $6.7 million from
December 31, 2008, notwithstanding approximately $24.4 million in cash used to
acquire Bayou Companies on February 20, 2009 and Corrpro Companies on March 31,
2009.
Insituform
Technologies, Inc. is a leading worldwide provider of proprietary technologies
and services for rehabilitating sewer, water and energy and mining piping
systems and the corrosion protection of industrial pipelines. More
information about Insituform can be found on its internet site at
www.insituform.com.
Forward-Looking
Statements
The
Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for
forward-looking statements. The Company makes forward-looking
statements in this news release that represent the Company’s beliefs or
expectations about future events or financial performance. These
forward-looking statements are based on information currently available to the
Company and on management’s beliefs, assumptions, estimates or projections and
are not guarantees of future events or results. When used in this
document, the words “anticipate,” “estimate,” “believe,” “plan,” “intend, “may,”
“will” and similar expressions are intended to identify forward-looking
statements, but are not the exclusive means of identifying such
statements. Such statements are subject to known and unknown risks,
uncertainties and assumptions, including those referred to in the “Risk Factors”
section of the Company’s Annual Report on Form 10-K for the year ended December
31, 2008, as filed with the Securities and Exchange Commission on March 2, 2009
and in the Company’s subsequent quarterly reports on Form 10-Q
. In light of these risks, uncertainties and assumptions, the
forward-looking events may not occur. In addition, our actual results
may vary materially from those anticipated, estimated, suggested or
projected. Except as required by law, we do not assume a duty to
update forward-looking statements, whether as a result of new information,
future events or otherwise. Investors should, however, review
additional disclosures made by the Company from time to time in its periodic
filings with the Securities and Exchange Commission. Please use
caution and do not place reliance on forward-looking statements. All
forward-looking statements made by the Company in this news release are
qualified by these cautionary statements.
Regulation
G Statement
Insituform
has presented certain information in this release excluding certain expense
items that impacted income and diluted earnings per share. The (non-GAAP)
earnings and guidance excludes one or more of the following: the earnings impact
of the exclusion of restructuring charges and acquisition-related expenses or
the exclusion of Bayou and Corrpro financial
information. Insituform management uses such non-GAAP
information internally to evaluate financial performance for its operations, as
the Company believes it allows it to more accurately compare the Company’s
ongoing performance across periods.
Insituform®, the
Insituform®
logo, InsituMain™, United Pipeline Systems®, Bayou Companies™
and Corrpro®
are the registered and unregistered trademarks of Insituform Technologies, Inc.
and its affiliates.
CONTACT: Insituform
Technologies, Inc.
David A. Martin, Senior Vice President
and Chief Financial Officer
(636) 530-8000
INSITUFORM
TECHNOLOGIES, INC. AND SUBSIDIARIES
(In
thousands, except per share amounts)
For
the Three Months Ended
December
31,
|
For
the Twelve Months Ended December 31,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Revenues
|
$ 213,806 | $ 137,274 | $ 726,866 | $ 536,664 | ||||||||||||
Cost
of revenues
|
154,926 | 97,915 | 536,275 | 407,067 | ||||||||||||
Gross
profit
|
58,880 | 39,359 | 190,591 | 129,597 | ||||||||||||
Operating
expenses
|
36,716 | 25,221 | 130,555 | 95,715 | ||||||||||||
Restructuring
charges
|
4,025 | – | 4,025 | – | ||||||||||||
Acquisition-related
expenses
|
275 | – | 6,894 | – | ||||||||||||
Operating
income
|
17,864 | 14,138 | 49,117 | 33,882 | ||||||||||||
Other
income (expense):
|
||||||||||||||||
Interest
expense
|
(2,492 | ) | (1,852 | ) | (8,296 | ) | (5,398 | ) | ||||||||
Interest
income
|
216 | 1,351 | 520 | 3,761 | ||||||||||||
Other
|
768 | 690 | 1,423 | 1,627 | ||||||||||||
Total
other income (expense)
|
(1,508 | ) | 189 | (6,353 | ) | (10 | ) | |||||||||
Income
before taxes on income
|
16,356 | 14,327 | 42,764 | 33,872 | ||||||||||||
Taxes
on income
|
4,876 | 3,783 | 12,561 | 8,625 | ||||||||||||
Income
before equity in earnings (losses) of affiliated
companies
|
11,480 | 10,544 | 30,203 | 25,247 | ||||||||||||
Equity
in earnings (losses) of affiliated companies,
net of tax
|
489 | (3 | ) | 1,192 | (246 | ) | ||||||||||
Income
before discontinued operations
|
11,969 | 10,541 | 31,395 | 25,001 | ||||||||||||
Loss
from discontinued operations, net of tax
|
(134 | ) | (692 | ) | (4,070 | ) | (2,436 | ) | ||||||||
Net
income
|
11,835 | 9,849 | 27,325 | 22,565 | ||||||||||||
Less: net
income attributable to noncontrolling interests
|
(152 | ) | (199 | ) | (1,154 | ) | (925 | ) | ||||||||
Net
income attributable to common stockholders
|
$ 11,683 | $ 9,650 | $ 26,171 | $ 21,640 | ||||||||||||
Earnings
(loss) per share:
|
||||||||||||||||
Basic:
|
||||||||||||||||
Income
from continuing operations
|
$ 0.31 | $ 0.37 | $ 0.81 | $ 0.87 | ||||||||||||
Loss
from discontinued operations
|
(0.01 | ) | (0.03 | ) | (0.11 | ) | (0.09 | ) | ||||||||
Net
income
|
$ 0.30 | $ 0.34 | $ 0.70 | $ 0.78 | ||||||||||||
Diluted:
|
||||||||||||||||
Income
from continuing operations
|
$ 0.31 | $ 0.37 | $ 0.81 | $ 0.86 | ||||||||||||
Loss
from discontinued operations
|
(0.01 | ) | (0.03 | ) | (0.11 | ) | (0.09 | ) | ||||||||
Net
income
|
$ 0.30 | $ 0.34 | $ 0.70 | $ 0.77 | ||||||||||||
Weighted
average number of shares:
|
||||||||||||||||
Basic
|
38,525,579 | 27,472,124 | 37,134,295 | 27,537,702 | ||||||||||||
Diluted
|
39,010,750 | 28,106,210 | 37,513,527 | 28,179,931 |
INSITUFORM
TECHNOLOGIES. INC.
STATEMENT
OF INCOME RECONCILIATION
(Unaudited)
(Non-GAAP)
(in
thousands, except share information)
Excluded
Charges
|
||||||||||||||||||||||||
Three
Months
Ended
December
31,
2009
|
Acquisition
Expenses
|
Europe
Restructuring
Charge
|
Corrpro
Restructuring
Charge
|
Results
Excluding Charges
|
Three
Months
Ended
December
31,
2008
|
|||||||||||||||||||
Revenues
|
$ 213,806 | $ – | $ – | $ – | $ 213,806 | $ 137,274 | ||||||||||||||||||
Cost
of revenues
|
154,926 | – | – | – | 154,926 | 97,915 | ||||||||||||||||||
Gross
profit
|
58,880 | – | – | – | 58,880 | 39,359 | ||||||||||||||||||
Operating
expenses
|
36,716 | – | (1,217 | ) | – | 35,499 | 25,221 | |||||||||||||||||
Restructuring
charges
|
4,025 | – | (3,349 | ) | (676 | ) | – | – | ||||||||||||||||
Acquisition-related
expenses
|
275 | (275 | ) | – | – | – | – | |||||||||||||||||
Operating
income
|
17,864 | 275 | 4,566 | 676 | 23,381 | 14,138 | ||||||||||||||||||
Other
income (expense):
|
||||||||||||||||||||||||
Interest
expense
|
(2,492 | ) | – | – | – | (2,492 | ) | (1,852 | ) | |||||||||||||||
Interest
income
|
216 | – | – | – | 216 | 1,351 | ||||||||||||||||||
Other
|
768 | – | – | – | 768 | 690 | ||||||||||||||||||
Total
other income (expense)
|
(1,508 | ) | – | – | – | (1,508 | ) | 189 | ||||||||||||||||
Income
before taxes on income
|
16,356 | 275 | 4,566 | 676 | 21,873 | 14,327 | ||||||||||||||||||
Taxes
on income
|
4,876 | 79 | 1,190 | 256 | 6,401 | 3,783 | ||||||||||||||||||
Income
before equity in
earnings
(losses) of
affiliated
companies
|
11,480 | 196 | 3,376 | 420 | 15,472 | 10,544 | ||||||||||||||||||
Equity
in earnings (losses) of
affiliated
companies
|
489 | – | – | – | 489 | (3 | ) | |||||||||||||||||
Income
before discontinued
operations
|
11,969 | 196 | 3,376 | 420 | 15,961 | 10,541 | ||||||||||||||||||
Loss
from discontinued
operations,
net of tax
|
(134 | ) | – | – | – | (134 | ) | (692 | ) | |||||||||||||||
Net
income
|
11,835 | 196 | 3,376 | 420 | 15,827 | 9,849 | ||||||||||||||||||
Less
income attributable to
noncontrolling
interests
|
(152 | ) | – | – | – | (152 | ) | (199 | ) | |||||||||||||||
Net
income attributable to
common
stockholders
|
$ 11,683 | $ 196 | $ 3,376 | $ 420 | $ 15,675 | $ 9,650 | ||||||||||||||||||
Earnings
(loss) per share:
|
||||||||||||||||||||||||
Basic:
|
||||||||||||||||||||||||
Income
from continuing
operations
|
$ 0.31 | $ 0.41 | $ 0.37 | |||||||||||||||||||||
Loss
from discontinued
operations
|
(0.01 | ) | (0.01 | ) | (0.03 | ) | ||||||||||||||||||
Net
income
|
$ 0.30 | $ 0.40 | $ 0.34 | |||||||||||||||||||||
Diluted:
|
||||||||||||||||||||||||
Income
from continuing
operations
|
$ 0.31 | $ 0.41 | $ 0.37 | |||||||||||||||||||||
Loss
from discontinued
operations
|
(0.01 | ) | (0.01 | ) | (0.03 | ) | ||||||||||||||||||
Net
income
|
$ 0.30 | $ 0.40 | $ 0.34 | |||||||||||||||||||||
Weighted
average number of
shares:
|
||||||||||||||||||||||||
Basic
|
38,525,579 | 38,525,579 | 27,472,124 | |||||||||||||||||||||
Diluted
|
39,010,750 | 39,010,750 | 28,106,210 |
INSITUFORM
TECHNOLOGIES. INC.
STATEMENT
OF INCOME RECONCILIATION
(Unaudited)
(Non-GAAP)
(in
thousands, except share information)
Excluded
Charges
|
||||||||||||||||||||||||
Twelve
Months
Ended
December
31,
2009
|
Acquisition
Expenses
|
Europe
Restructuring
Charge
|
Corrpro
Restructuring
Charge
|
Results
Excluding
Charges
|
Twelve
Months
Ended
December
31,
2008
|
|||||||||||||||||||
Revenues
|
$ 726,866 | $ – | $ – | $ – | $ 726,866 | $ 536,664 | ||||||||||||||||||
Cost
of revenues
|
536,275 | – | – | – | 536,275 | 407,067 | ||||||||||||||||||
Gross
profit
|
190,591 | – | – | – | 190,591 | 129,597 | ||||||||||||||||||
Operating
expenses
|
130,555 | – | (1,217 | ) | – | 129,338 | 95,715 | |||||||||||||||||
Restructuring
charges
|
4,025 | – | (3,349 | ) | (676 | ) | – | – | ||||||||||||||||
Acquisition-related
expenses
|
6,894 | (6,894 | ) | – | – | – | – | |||||||||||||||||
Operating
income
|
49,117 | 6,894 | 4,566 | 676 | 61,253 | 33,882 | ||||||||||||||||||
Other
income (expense):
|
||||||||||||||||||||||||
Interest
expense
|
(8,296 | ) | – | – | – | (8,296 | ) | (5,398 | ) | |||||||||||||||
Interest
income
|
520 | – | – | – | 520 | 3,761 | ||||||||||||||||||
Other
|
1,423 | – | – | – | 1,423 | 1,627 | ||||||||||||||||||
Total
other income (expense)
|
(6,353 | ) | – | – | – | (6,353 | ) | (10 | ) | |||||||||||||||
Income
before taxes on income
|
42,764 | 6,894 | 4,566 | 676 | 54,900 | 33,872 | ||||||||||||||||||
Taxes
on income
|
12,561 | 2,005 | 1,190 | 256 | 16,012 | 8,625 | ||||||||||||||||||
Income
before equity in
earnings
(losses) of
affiliated
companies
|
30,203 | 4,889 | 3,376 | 420 | 38,888 | 25,247 | ||||||||||||||||||
Equity
in earnings (losses) of
affiliated
companies
|
1,192 | – | – | – | 1,192 | (246 | ) | |||||||||||||||||
Income
before discontinued
operations
|
31,395 | 4,889 | 3,376 | 420 | 40,080 | 25,001 | ||||||||||||||||||
Loss
from discontinued
operations, net
of tax
|
(4,070 | ) | – | – | – | (4,070 | ) | (2,436 | ) | |||||||||||||||
Net
income
|
27,325 | 4,889 | 3,376 | 420 | 36,010 | 22,565 | ||||||||||||||||||
Less
income attributable to
noncontrolling
interests
|
(1,154 | ) | – | – | – | (1,154 | ) | (925 | ) | |||||||||||||||
Net
income attributable to
common
stockholders
|
$ 26,171 | $ 4,889 | $ 3,376 | $ 420 | $ 34,856 | $ 21,640 | ||||||||||||||||||
Earnings
(loss) per share:
|
||||||||||||||||||||||||
Basic:
|
||||||||||||||||||||||||
Income
from continuing
operations
|
$ 0.81 | $ 1.05 | $ 0.87 | |||||||||||||||||||||
Loss
from discontinued
operations
|
(0.11 | ) | (0.11 | ) | (0.09 | ) | ||||||||||||||||||
Net
income
|
$ 0.70 | $ 0.94 | $ 0.78 | |||||||||||||||||||||
Diluted:
|
||||||||||||||||||||||||
Income
from continuing
operations
|
$ 0.81 | $ 1.04 | $ 0.86 | |||||||||||||||||||||
Loss
from discontinued
operations
|
(0.11 | ) | (0.11 | ) | (0.09 | ) | ||||||||||||||||||
Net
income
|
$ 0.70 | $ 0.93 | $ 0.77 | |||||||||||||||||||||
Weighted
average number of
shares:
|
||||||||||||||||||||||||
Basic
|
37,134,295 | 37,134,295 | 27,537,702 | |||||||||||||||||||||
Diluted
|
37,513,527 | 37,513,527 | 28,179,931 |
INSITUFORM
TECHNOLOGIES, INC.
SEGMENT
DATA
(Unaudited)
(In
thousands, except per share amounts)
Three
Months Ended
December
31,
|
Twelve
Months Ended
December
31,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Revenues:
|
||||||||||||||||
North
American Sewer Rehabilitation
|
$ 95,369 | $ 82,802 | $ 354,418 | $ 340,296 | ||||||||||||
European
Sewer Rehabilitation
|
23,926 | 32,912 | 85,993 | 112,225 | ||||||||||||
Asia-Pacific
Sewer Rehabilitation
|
11,102 | 4,670 | 33,256 | 10,129 | ||||||||||||
Water
Rehabilitation
|
2,781 | 3,708 | 11,521 | 13,447 | ||||||||||||
Energy
and Mining
|
80,628 | 13,182 | 241,678 | 60,567 | ||||||||||||
Total
revenues
|
$ 213,806 | $ 137,274 | $ 726,866 | $ 536,664 | ||||||||||||
Gross
profit:
|
||||||||||||||||
North
American Sewer Rehabilitation
|
$ 26,431 | $ 19,031 | $ 91,346 | $ 75,436 | ||||||||||||
European
Sewer Rehabilitation
|
6,420 | 15,292 | 22,774 | 31,228 | ||||||||||||
Asia-Pacific
Sewer Rehabilitation
|
2,650 | 1,240 | 9,032 | 2,938 | ||||||||||||
Water
Rehabilitation
|
289 | 53 | 254 | 1,745 | ||||||||||||
Energy
and Mining
|
23,090 | 3,743 | 67,185 | 18,250 | ||||||||||||
Total
gross profit
|
$ 58,880 | $ 39,359 | $ 190,591 | $ 129,597 | ||||||||||||
Operating
income (loss):
|
||||||||||||||||
North
American Sewer Rehabilitation
|
$ 12,513 | $ 3,428 | $ 38,357 | $ 15,341 | ||||||||||||
European
Sewer Rehabilitation (1)
|
(3,125 | ) | 8,752 | (1,005 | ) | 7,664 | ||||||||||
Asia-Pacific
Sewer Rehabilitation
|
1,012 | 919 | 3,419 | 1,639 | ||||||||||||
Water
Rehabilitation
|
(207 | ) | (881 | ) | (2,578 | ) | (1,658 | ) | ||||||||
Energy
and Mining(2)
|
7,671 | 1,920 | 10,924 | 10,896 | ||||||||||||
Total
operating income
|
$ 17,864 | $ 14,138 | $ 49,117 | $ 33,882 |
_______________
(1)
|
Operating income in 2009 for the European Sewer Rehabilitation segment
included $4.6 million in reorganization expenses, which consisted
of employee severance and lease cancellation costs, along with write-downs
of certain assets as a result of the exit from various
markets.
|
(2)
|
Operating income in 2009 for the Energy and Mining segment included $6.9
million of acquisition-related expenses associated with the
acquisitions of Bayou,
Corrpro and Bayou Perma-Pipe
Canada.
|
INSITUFORM
TECHNOLOGIES, INC. AND SUBSIDIARIES
CONTRACT
BACKLOG
(Unaudited)
Backlog
|
December
31,
2009
|
September
30,
2009
|
June
30,
2009
|
March
31,
2009
|
December
31,
2008
|
|||||||||||||||
(in
millions)
|
||||||||||||||||||||
North
American sewer rehabilitation
|
$ 180.9 | $ 183.8 | $ 206.8 | $ 160.4 | $ 150.8 | |||||||||||||||
European
sewer rehabilitation
|
37.2 | 40.7 | 40.9 | 26.1 | 25.2 | |||||||||||||||
Asia-Pacific
sewer rehabilitation (1)
|
57.4 | 84.5 | 60.9 | 40.1 | 46.2 | |||||||||||||||
Water
rehabilitation
|
7.7 | 7.5 | 7.7 | 8.9 | 8.2 | |||||||||||||||
Energy
and Mining (2)
|
180.2 | 151.2 | 146.1 | 153.2 | 18.7 | |||||||||||||||
Total
|
$ 463.4 | $ 467.7 | $ 462.4 | $ 388.7 | $ 249.1 |
(1)
|
Contract
backlog for our Asia-Pacific Sewer Rehabilitation segment includes backlog
for our recently acquired interests in our joint ventures in Hong Kong
and
Australia of $12.4 million and $34.0 million, respectively, at December
31, 2009, $13.9 million and $35.1 million, respectively, at September 30,
2009, and $17.7
million
and $6.9 million, respectively at June 30, 2009. Contract
backlog for these operations were not included prior to June 30, 2009, as
they were not
consolidated
operations.
|
(2)
|
Contract
backlog for our Energy and Mining segment includes backlog of our recently
acquired Bayou and Corrpro businesses of $67.8 million
and
$55.1 million, respectively, at December 31, 2009, $64.8 million and $59.0
million, respectively, at September 30, 2009, $66.8 million and $64.5
million,
respectively,
at June 30, 2009 and $76.7 million and $62.2 million, respectively, as of
March 31, 2009. Such operations were not part of our company as
of
December
31, 2008.
|
Contract
backlog is our expectation of revenues to be generated from received, signed and
uncompleted contracts, the cancellation of which is not anticipated at the time
of reporting. Contract backlog excludes any term contract amounts for which
there is not specific and determinable work released and projects where we have
been advised that we are the low bidder, but have not formally been awarded the
contract.
Insituform
Technologies, Inc. and Subsidiaries
As
of December 31, 2009 and 2008
(In
thousands, except share information)
December
31,
2009
|
December
31,
2008
|
|||||||
Assets
|
||||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ 106,064 | $ 99,321 | ||||||
Restricted
cash
|
1,339 | 1,829 | ||||||
Receivables,
net
|
147,835 | 97,257 | ||||||
Retainage
|
22,656 | 21,380 | ||||||
Costs
and estimated earnings in excess of billings
|
64,821 | 37,224 | ||||||
Inventories
|
32,125 | 16,320 | ||||||
Prepaid
expenses and other assets
|
27,604 | 37,637 | ||||||
Current
assets of discontinued operations
|
1,189 | 13,704 | ||||||
Total
current assets
|
403,633 | 324,672 | ||||||
Property, plant and
equipment, less accumulated depreciation
|
148,435 | 71,423 | ||||||
Other
assets
|
||||||||
Goodwill
|
180,506 | 122,961 | ||||||
Identified
intangible assets, less accumulated amortization
|
78,311 | 10,353 | ||||||
Investments
in affiliated companies
|
27,581 | 6,769 | ||||||
Deferred
income tax assets
|
11,203 | 3,190 | ||||||
Other
assets
|
8,827 | 4,095 | ||||||
Total
other assets
|
306,428 | 147,368 | ||||||
Non-current
assets of discontinued operations
|
4,283 | 5,843 | ||||||
Total
Assets
|
$ 862,779 | $ 549,306 | ||||||
Liabilities and Equity
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable and accrued expenses
|
$ 146,702 | $ 97,593 | ||||||
Billings
in excess of costs and estimated earnings
|
12,697 | 9,596 | ||||||
Current
maturities of long-term debt, line of credit and notes
payable
|
12,742 | 938 | ||||||
Current
liabilities of discontinued operations
|
339 | 1,541 | ||||||
Total
current liabilities
|
172,480 | 109,668 | ||||||
Long-term debt,
less current maturities
|
101,500 | 65,000 | ||||||
Deferred
income tax liabilities
|
31,449 | – | ||||||
Other
liabilities
|
12,849 | 2,831 | ||||||
Non-current
liabilities of discontinued operations
|
979 | 818 | ||||||
Total
liabilities
|
319,257 | 178,317 | ||||||
Stockholders’
equity
|
||||||||
Preferred
stock, undesignated, $.10 par – shares authorized 2,000,000; none
outstanding
|
– | – | ||||||
Common
stock, $.01 par – shares authorized 60,000,000; shares issued and
outstanding
38,933,944 and
27,977,785
|
389 | 280 | ||||||
Additional
paid-in capital
|
242,563 | 109,235 | ||||||
Retained
earnings
|
286,787 | 260,616 | ||||||
Accumulated
other comprehensive income (loss)
|
8,313 | (2,154 | ) | |||||
Total
stockholders’ equity before noncontrolling interests
|
538,052 | 367,977 | ||||||
Noncontrolling
interests
|
5,470 | 3,012 | ||||||
Total
equity
|
543,522 | 370,989 | ||||||
Total
Liabilities and Equity
|
$ 862,779 | $ 549,306 |
Insituform
Technologies, Inc. and Subsidiaries
For
the Years Ended December 31, 2009 and 2008
(In
thousands)
2009
|
2008
|
|||||||
Cash flows from
operating activities:
|
||||||||
Net
income
|
$ 27,325 | $ 22,565 | ||||||
Loss
from discontinued operations
|
(4,070 | ) | (2,436 | ) | ||||
Income
from continuing operations
|
31,395 | 25,001 | ||||||
Adjustments
to reconcile to net cash provided by operating activities:
|
||||||||
Depreciation
and amortization
|
28,440 | 17,307 | ||||||
(Gain)
loss on sale of fixed assets
|
641 | (1,607 | ) | |||||
Equity-based
compensation expense
|
4,839 | 4,474 | ||||||
Deferred
income taxes
|
3,994 | 2,780 | ||||||
Dividends
received from equity investments, net of equity earnings
|
1,345 | – | ||||||
Patent
expense
|
(2,705 | ) | – | |||||
Other
|
(3,998 | ) | (2,178 | ) | ||||
Changes
in operating assets and liabilities:
|
||||||||
Restricted
cash
|
567 | 354 | ||||||
Receivables
net, retainage and costs and estimated earnings in excess of
billings
|
(19,363 | ) | (9,921 | ) | ||||
Inventories
|
954 | 635 | ||||||
Prepaid
expenses and other assets
|
8,991 | (11,104 | ) | |||||
Accounts
payable and accrued expenses
|
491 | 12,629 | ||||||
Net
cash provided by operating activities of continuing
operations
|
55,591 | 38,370 | ||||||
Net
cash provided by operating activities of discontinued
operations
|
6,162 | 1,558 | ||||||
Net
cash provided by operating activities
|
61,753 | 39,928 | ||||||
Cash flows from
investing activities:
|
||||||||
Capital
expenditures
|
(21,837 | ) | (15,022 | ) | ||||
Proceeds
from sale of fixed assets
|
1,855 | 1,786 | ||||||
Purchase
of remaining interests in Hong Kong and Australian joint
ventures
|
(278 | ) | – | |||||
Purchase
of Garneau, Inc. assets
|
(11,346 | ) | – | |||||
Proceeds
from net foreign investment hedges
|
6,818 | – | ||||||
Purchase
of Bayou and Corrpro, net of cash acquired
|
(209,714 | ) | – | |||||
Net
cash used in investing activities of continuing operations
|
(234,502 | ) | (13,236 | ) | ||||
Net
cash provided by investing activities of discontinued
operations
|
798 | 1,339 | ||||||
Net
cash used in investing activities
|
(233,704 | ) | (11,897 | ) | ||||
Cash flows from
financing activities:
|
||||||||
Proceeds
from issuance of common stock
|
128,969 | 887 | ||||||
Additional
tax (benefit) expense from stock option exercises recorded in
additional
paid-in capital
|
29 | (16 | ) | |||||
Proceeds
from notes payable
|
2,637 | 2,582 | ||||||
Principal
payments on notes payable
|
(4,159 | ) | (2,742 | ) | ||||
Investments
from noncontrolling interests
|
4,107 | – | ||||||
Purchase
of noncontrolling interests in Insituform Linings
|
(3,979 | ) | – | |||||
Dividend
paid to noncontrolling interest
|
(959 | ) | – | |||||
Principal
payments on long-term debt
|
(7,500 | ) | – | |||||
Proceeds
from long-term debt
|
53,700 | – | ||||||
Net
cash provided by financing activities
|
172,845 | 711 | ||||||
Effect
of exchange rate changes on cash
|
5,849 | (8,382 | ) | |||||
Net
increase in cash and cash equivalents for the period
|
6,743 | 20,360 | ||||||
Cash
and cash equivalents, beginning of year
|
99,321 | 78,961 | ||||||
Cash
and cash equivalents, end of year
|
$ 106,064 | $ 99,321 |