Aegion Corporation Reports 2018 Second Quarter Financial Results

ST. LOUIS, Aug. 01, 2018 (GLOBE NEWSWIRE) --

A PDF accompanying this announcement is available at http://resource.globenewswire.com/Resource/Download/a48a9184-fbda-4fb1-82f3-63f056d2dfa7

Management continues to target adjusted EPS growth of at least 30% in 2018; Exiting underperforming operations

• Q2’18 earnings per diluted share were $0.24 compared to earnings per diluted share of $0.33 in Q2’17. Q2’18 adjusted (non-GAAP)¹ earnings per diluted share were $0.34, improving from prior year earnings per diluted share of $0.33.
• Contract backlog as of June 30, 2018 remains strong at $738 million, driven by new orders in the quarter of $352 million and a record ending backlog position in North America CIPP.
• Aegion's continued focus on simplifying the business to generate more predictable results led to decisions to exit CIPP contracting operations in Denmark and Australia, with actions expected to be completed by the end of FY'18. As part of the 2017 Restructuring program, management will further evaluate its international footprint to assess the long-term viability of each business unit.

¹Adjusted (non-GAAP) results exclude certain charges related to the Company’s restructuring activities, acquisition and divestiture-related expenses and credit facility amendment fees.  Reconciliation of adjusted results is included below.

Q2 2018 HIGHLIGHTS

• Infrastructure Solutions' adjusted operating income of $12 million improved 43 percent from the prior-year period, despite $1 million in adjusted operating losses in the quarter and $2.5 million in adjusted losses year to date from Australia and Denmark CIPP contracting businesses.

• Corrosion Protection results include strong performance on the international field joint coatings projects and a 600 basis point adjusted gross margin improvement in the cathodic protection business that helped offset lost contribution from the large deepwater project substantially completed in FY'17.

• Energy Services delivered year-over-year improvement in operating income while continuing to invest for further growth in specialty services offerings.

“Aegion delivered Q2’18 adjusted EPS above Q2’17, despite significant prior year contribution from the large deepwater project. Results benefited from top-line strength in North America CIPP, improved cathodic protection margins and strong execution on the large international coating projects.  

Looking forward, we are exiting our Denmark and Australia CIPP contracting operations as part of a further comprehensive review of our international footprint. We see 2H'18 tailwinds from our strong backlog position, which includes record North America CIPP levels, recently awarded North America Tite Liner® projects and nearly 40 percent in remaining work on the large international coating projects. With this market strength and ongoing productivity improvements, we are poised to deliver significantly higher 2H’18 results and continue to expect adjusted EPS growth of at least 30 percent in FY'18."

Charles R. Gordon, President and Chief Executive Officer

Selected Consolidated Financial Highlights

Net income and diluted earnings per share includes non-controlling interest.

1. Q2 2018 Non-GAAP pre-tax adjustments:

• Restructuring: Charges for operating expenses of $1,373 primarily related to wind-down expenses, reserves for potentially uncollectible receivables, fixed asset disposals and other restructuring-related charges; and restructuring and related charges of $1,540 related to employee severance, extension of benefits, employment assistance programs and early lease and contract termination costs.
• Acquisition and Divestiture Expenses: Expenses of $832 incurred in connection with the Company’s acquisition of Hebna and planned divestitures of Bayou and the CIPP operations in Australia.
• Credit Facility Fees: Charges related to certain out-of-pocket expenses associated with amending the Company’s credit facility.

⁽²⁾    Q2 2017 Non-GAAP pre-tax adjustments:

• Restructuring: Charges for cost of revenues of $(12) related to the write-off of certain other assets; and charges for operating expenses of $285 primarily related to wind-down and other restructuring-related charges, net of the reversal of reserves for potentially uncollectible receivables.

Selected Segment Financial Highlights

Infrastructure Solutions

1. Includes non-GAAP adjustments related to: (i) pre-tax restructuring charges associated with severance and benefit related costs, early lease and contract termination costs, fixed asset disposals and other restructuring charges; and (ii) expenses incurred in connection with the planned divestiture of the CIPP business in Australia.
2. Includes non-GAAP adjustments related to pre-tax restructuring charges associated with the write-off of certain other assets, reversal of reserves for potentially uncollectible receivables, wind-down and other restructuring charges.

Corrosion Protection

1. Includes non-GAAP adjustments related to: (i) pre-tax restructuring charges associated with severance and benefit related costs, early lease and contract termination costs and other restructuring charges; and (ii) expenses incurred in connection with the acquisition of Hebna and planned divestiture of the Bayou business.

Energy Services