Aegion Corporation Reports 2020 Third Quarter Financial Results

Management evaluating strategic alternatives for Energy Services; Focused on growing water and wastewater market presence
ST. LOUIS, Oct. 28, 2020 (GLOBE NEWSWIRE) —A PDF accompanying this release is available at: http://ml.globenewswire.com/Resource/Download/f38a396c-11e4-4cb8-9b96-6b17a82d42ecQ3’20 loss per diluted share was $0.93 compared to earnings per diluted share of $0.19 in Q3’19, reflecting a $39 million pre-tax non-cash goodwill impairment charge for Energy Services. Q3’20 adjusted (non-GAAP)¹ earnings per diluted share were $0.32 compared to $0.40 in the prior year. Q3’20 adjusted results were at the high end of guidance expectations, driven by continued strength from the Insituform North America business.Revenues in the quarter were $276 million. The Insituform North America business grew revenues by 10% year over year, helping to offset COVID-related impacts from Energy Services and the coatings business within Corrosion Protection.Strong ending cash and net debt levels at September 30, 2020, position Aegion well for organic and inorganic growth.Management focused on capitalizing on strong balance sheet and industry leading position to grow the North America water and wastewater business. BofA Securities engaged to review strategic alternatives for the Energy Services segment.Q4’20 adjusted earnings are expected to be slightly below Q3’20 results, primarily reflecting typical seasonal revenue reductions in Infrastructure Solutions.
^{(1)Adjusted (non-GAAP) results exclude certain charges related to the Company’s restructuring activities, acquisition and divestiture-related expenses, goodwill and indefinite-lived intangible asset impairment, impairment of assets held for sale, project warranty accruals, credit facility amendment fees and impacts from the Tax Cuts and Jobs Act. Reconciliation of adjusted results is included below.}Q3’20 HIGHLIGHTSTop-line reductions drove a 6% decline in adjusted operating income. However, strong Insituform performance and a sharp improvement in the Corrpro North America business drove increases in both adjusted gross margins and adjusted operating margins.Ending cash of $77 million increased 40% over the prior year, and year-to-date operating cash flows of $79 million exceeded the full-year performance in each of the last five years. The Company paid off its revolver borrowings in Q3’20, resulting in ending net debt levels of $150 million.Contract backlog as of September 30, 2020, was $678 million. Excluding exited or to-be-exited businesses, backlog increased 2% compared to prior year levels.
“Our performance in the quarter and outlook as we close out the year reflect our continued success navigating unprecedented near-term challenges.Looking forward, we are advancing a strategy to better leverage our differentiated pipeline rehabilitation and protection technologies for the benefit of public health and the environment. A core element of the strategy is to focus on meaningful growth opportunities in the water and wastewater space to capitalize on the strength of our largest and most profitable business.The evaluation of strategic alternatives for the Energy Services business reflects a deliberate multi-year shift to simplify and drive a narrower focus on our core markets. Our performance today and plans moving forward position us well to create significant long-term value for our shareholders.”Charles R. Gordon, President and Chief Executive Officer, AegionSelected Consolidated Financial HighlightsNet income (loss) and diluted earnings (loss) per share includes non-controlling interest