ST. LOUIS--(BUSINESS WIRE)--
Aegion Corporation (Nasdaq Global Select Market: AEGN) today revised its 2013 outlook based on November actual results and an update to the forecast for December. The Company now expects non-GAAP full year earnings per share from continuing operations to be in the range of $1.27 to $1.32 from an earlier guidance of $1.53 to $1.60. This includes a half year contribution from Brinderson within the previous range of $0.08 to $0.10. Non-GAAP diluted earnings per share from continuing operations in the fourth quarter are now forecasted to be in the range of $0.40 to $0.45.
Commercial and Structural’s North American business continued to struggle to build momentum in the US during October and November as a result of the following previously discussed factors: (1) lower workable backlog from a stall in sales activity that is being addressed by the ongoing investment in our sales organization; (2) project performance issues from inadequate cost estimation on several key projects in late 2012; (3) customers taking more time to finalize the award of new contracts and issue work releases; and (4) certain delays in the setup of new projects in hand, which delayed project execution. We continue our efforts to enhance the sales organization to properly resource and align the organization in its primary end markets: pipelines, buildings and transportation. Similar to our efforts with North American Water and Wastewater in 2010 and 2011, we also are instituting best-in-class project management to ensure consistency in execution on all projects. The Company believes these efforts will lead to improved sales acquisitions and project execution in 2014. Commercial and Structural’s expected results account for approximately half of the shortfall to the Company’s prior guidance.
The revised fourth quarter outlook also reflects a shift in project activity into 2014 for several businesses. The Canadian construction season is proceeding at an uncharacteristically slow pace affecting United Pipeline Systems’ and Bayou’s Canadian operations. The pace for offshore pipe welding by the general contractor for the Saudi Arabia Wasit gas field project has been below predicted levels and it is not expected to improve in December based on a just completed assessment of the project, which significantly reduces the number of available welded joint coatings for CRTS. Several important projects for the Asia-Pacific water and wastewater business also did not begin as scheduled in the fourth quarter.
J. Joseph Burgess, Aegion’s President and Chief Executive Officer, commented, “As we discussed in October, we had a strong outlook for the fourth quarter based on existing backlog and visibility into the traditional project acquisitions at this time of year. While we are experiencing strong performance from North America Water and Wastewater and Corrpro as well as forecasted contributions from Brinderson, we have not achieved the required level of project activity in several of our businesses to meet our guidance. The magnitude of the project delays in 2013 is unprecedented, but it does not detract from our growth outlook.”
“We are finalizing our plans for 2014 and will give guidance at our fourth quarter and year-end 2013 earnings announcement in late February. We have favorable market indicators across all of our businesses with the exception of offshore Gulf of Mexico where we are monitoring the bid market and timing of potential project acquisitions for our Bayou New Iberia, Louisiana operations. The market remains favorable for North American Water and Wastewater and we anticipate end of year backlog for this business to be at record levels. Corrpro and United Pipeline Systems have supportive end markets in North America and the Middle East. Brinderson is expected to contribute increasing earnings per share from a growing backlog position with recent maintenance program awards in California and prospects for growth in the Permian Basin along with the inclusion of a full year of results. The planned offshore pipe installation for the Wasit gas field supports the completion of now a greater portion of the CRTS pipe welded coating project in 2014. As we see success from the investments we are making in sales, project management and operational execution in the Commercial and Structural platform, 2014 should be a year of recovery, where we plan to execute projects deferred from 2013, as well as build backlog and improve execution throughout the year. We remain very confident of our position in the markets we serve and look forward to Aegion delivering growth in 2014 and beyond.”
The Company also is working to evaluate the carrying values of certain of its business units based upon the revised forecast and the outlook for 2014. The revised guidance does not reflect any reassessment of the business unit carrying values.
Aegion Corporation is a global leader in infrastructure protection and maintenance, providing proprietary technologies and services to (i) protect against the corrosion of industrial pipelines; (ii) rehabilitate and strengthen water, wastewater, energy and mining piping systems and buildings, bridges, tunnels and waterfront structures; and (iii) utilize integrated professional services in engineering, procurement, construction, maintenance and turnaround services to a broad range of energy related industries. More information about Aegion can be found on our internet site at www.aegion.com.
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. We make forward-looking statements in this news release that represent our beliefs or expectations about future events or financial performance. These forward-looking statements are based on information currently available to us 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 our Annual Report on Form 10-K for the year ended December 31, 2012, as filed with the Securities and Exchange Commission on February 27, 2013. 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 us from time to time in our 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 us in this news release are qualified by these cautionary statements.
Regulation G Statement
We have presented certain information in this release excluding certain items that impacted income, expense and earnings per share from continuing operations. The (non-GAAP) earnings per share exclude the earnings impact of acquisition-related expenses, charges associated with our decision to liquidate Bayou Welding Works and a goodwill write-down associated with the anticipated sale of our shares in Bayou Coatings, LLC. Aegion management uses such non-GAAP information internally to evaluate financial performance for our operations, as we believe it allows us to more accurately compare our ongoing performance across periods.
Aegion®, the Aegion® logo, Insituform®, the Insituform® logo, United Pipeline Systems®, Tite Liner®, Bayou Companies®, Corrpro®, CRTS™, Fibrwrap®, Fyfe® and Brinderson® are the registered and unregistered trademarks of Aegion Corporation and its affiliates.
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David A. Martin, 636-530-8000
Senior Vice President and Chief Financial Officer