x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
For the quarterly period ended
March 31, 2016
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
For the transition period from
to
|
Aegion Corporation
|
(Exact name of registrant as specified in its charter)
|
Large accelerated filer
x
|
|
Accelerated filer
¨
|
|
|
|
Non-accelerated filer
¨
|
|
Smaller reporting company
¨
|
PART I—FINANCIAL INFORMATION
|
|
|
|
Item 1. Financial Statements (Unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PART II—OTHER INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarters Ended
March 31,
|
||||||
|
2016
|
|
2015
|
||||
Revenues
|
$
|
293,908
|
|
|
$
|
309,166
|
|
Cost of revenues
|
239,494
|
|
|
249,976
|
|
||
Gross profit
|
54,414
|
|
|
59,190
|
|
||
Operating expenses
|
50,725
|
|
|
49,084
|
|
||
Acquisition-related expenses
|
1,031
|
|
|
323
|
|
||
Restructuring charges
|
6,797
|
|
|
658
|
|
||
Operating income (loss)
|
(4,139
|
)
|
|
9,125
|
|
||
Other income (expense):
|
|
|
|
||||
Interest expense
|
(3,615
|
)
|
|
(3,232
|
)
|
||
Interest income
|
32
|
|
|
126
|
|
||
Other
|
(973
|
)
|
|
(2,779
|
)
|
||
Total other expense
|
(4,556
|
)
|
|
(5,885
|
)
|
||
Income (loss) before taxes on income
|
(8,695
|
)
|
|
3,240
|
|
||
Taxes (benefit) on income (loss)
|
(4,746
|
)
|
|
1,868
|
|
||
Net income (loss)
|
(3,949
|
)
|
|
1,372
|
|
||
Non-controlling interests
|
157
|
|
|
(13
|
)
|
||
Net income (loss) attributable to Aegion Corporation
|
$
|
(3,792
|
)
|
|
$
|
1,359
|
|
|
|
|
|
||||
Earnings (loss) per share attributable to Aegion Corporation:
|
|
|
|
||||
Basic
|
$
|
(0.11
|
)
|
|
$
|
0.04
|
|
Diluted
|
$
|
(0.11
|
)
|
|
$
|
0.04
|
|
|
For the Quarters Ended
March 31, |
||||||
|
2016
|
|
2015
|
||||
Net income (loss)
|
$
|
(3,949
|
)
|
|
$
|
1,372
|
|
Other comprehensive income (loss):
|
|
|
|
||||
Currency translation adjustments
|
(557
|
)
|
|
(16,096
|
)
|
||
Pension activity, net of tax
(1)
|
(122
|
)
|
|
21
|
|
||
Deferred gain (loss) on hedging activity, net of tax
(2)
|
(3,573
|
)
|
|
409
|
|
||
Total comprehensive loss
|
(8,201
|
)
|
|
(14,294
|
)
|
||
Comprehensive (income) loss attributable to non-controlling interests
|
(85
|
)
|
|
994
|
|
||
Comprehensive loss attributable to Aegion Corporation
|
$
|
(8,286
|
)
|
|
$
|
(13,300
|
)
|
(1)
|
Amounts presented net of tax of
$(30)
and
$5
for the quarters ended
March 31, 2016
and
2015
, respectively.
|
(2)
|
Amounts presented net of tax of
$(2,392)
and
$271
for the quarters ended
March 31, 2016
and
2015
, respectively.
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
127,859
|
|
|
$
|
209,253
|
|
Restricted cash
|
6,615
|
|
|
5,796
|
|
||
Receivables, net of allowances of $7,544 and $14,524, respectively
|
171,747
|
|
|
200,883
|
|
||
Retainage
|
36,708
|
|
|
37,285
|
|
||
Costs and estimated earnings in excess of billings
|
99,911
|
|
|
89,141
|
|
||
Inventories
|
63,432
|
|
|
47,779
|
|
||
Prepaid expenses and other current assets
|
62,811
|
|
|
66,999
|
|
||
Assets held for sale
|
—
|
|
|
21,060
|
|
||
Total current assets
|
569,083
|
|
|
678,196
|
|
||
Property, plant & equipment, less accumulated depreciation
|
151,086
|
|
|
144,833
|
|
||
Other assets
|
|
|
|
||||
Goodwill
|
294,479
|
|
|
249,120
|
|
||
Identified intangible assets, less accumulated amortization
|
205,498
|
|
|
174,118
|
|
||
Deferred income tax assets
|
3,116
|
|
|
2,130
|
|
||
Other assets
|
5,120
|
|
|
5,616
|
|
||
Total other assets
|
508,213
|
|
|
430,984
|
|
||
Total Assets
|
$
|
1,228,382
|
|
|
$
|
1,254,013
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
66,655
|
|
|
$
|
72,732
|
|
Accrued expenses
|
99,619
|
|
|
112,951
|
|
||
Billings in excess of costs and estimated earnings
|
86,962
|
|
|
87,475
|
|
||
Current maturities of long-term debt and line of credit
|
17,649
|
|
|
17,648
|
|
||
Liabilities held for sale
|
—
|
|
|
6,961
|
|
||
Total current liabilities
|
270,885
|
|
|
297,767
|
|
||
Long-term debt, less current maturities
|
363,381
|
|
|
333,480
|
|
||
Deferred income tax liabilities
|
17,872
|
|
|
19,386
|
|
||
Other non-current liabilities
|
11,091
|
|
|
8,824
|
|
||
Total liabilities
|
663,229
|
|
|
659,457
|
|
||
|
|
|
|
||||
(See Commitments and Contingencies: Note 10)
|
|
|
|
|
|
||
|
|
|
|
||||
Equity
|
|
|
|
||||
Preferred stock, undesignated, $.10 par – shares authorized 2,000,000; none outstanding
|
—
|
|
|
—
|
|
||
Common stock, $.01 par – shares authorized 125,000,000; shares issued and outstanding 35,156,241 and 36,053,499, respectively
|
352
|
|
|
361
|
|
||
Additional paid-in capital
|
186,036
|
|
|
199,951
|
|
||
Retained earnings
|
421,782
|
|
|
425,574
|
|
||
Accumulated other comprehensive loss
|
(52,355
|
)
|
|
(47,861
|
)
|
||
Total stockholders’ equity
|
555,815
|
|
|
578,025
|
|
||
Non-controlling interests
|
9,338
|
|
|
16,531
|
|
||
Total equity
|
565,153
|
|
|
594,556
|
|
||
Total Liabilities and Equity
|
$
|
1,228,382
|
|
|
$
|
1,254,013
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Non-
Controlling
Interests
|
|
Total
Equity
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
BALANCE, December 31, 2014
|
37,360,515
|
|
|
$
|
374
|
|
|
$
|
217,289
|
|
|
$
|
433,641
|
|
|
$
|
(24,669
|
)
|
|
$
|
18,450
|
|
|
$
|
645,085
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,359
|
|
|
—
|
|
|
13
|
|
|
1,372
|
|
||||||
Issuance of common stock upon stock option exercises
|
100,191
|
|
|
1
|
|
|
1,113
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,114
|
|
||||||
Issuance of shares pursuant to restricted stock units
|
10,856
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of shares pursuant to deferred stock unit awards
|
3,257
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Forfeitures of restricted shares
|
(18,195
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Shares repurchased and retired
|
(437,669
|
)
|
|
(5
|
)
|
|
(7,617
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,622
|
)
|
||||||
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
1,663
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,663
|
|
||||||
Currency translation adjustment and derivative transactions, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,659
|
)
|
|
(1,007
|
)
|
|
(15,666
|
)
|
||||||
BALANCE, March 31, 2015
|
37,018,955
|
|
|
$
|
370
|
|
|
$
|
212,448
|
|
|
$
|
435,000
|
|
|
$
|
(39,328
|
)
|
|
$
|
17,456
|
|
|
$
|
625,946
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
BALANCE, December 31, 2015
|
36,053,499
|
|
|
$
|
361
|
|
|
$
|
199,951
|
|
|
$
|
425,574
|
|
|
$
|
(47,861
|
)
|
|
$
|
16,531
|
|
|
$
|
594,556
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,792
|
)
|
|
—
|
|
|
(157
|
)
|
|
(3,949
|
)
|
||||||
Issuance of common stock upon stock option exercises
|
18,193
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
||||||
Issuance of shares pursuant to restricted stock units
|
9,733
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Forfeitures of restricted shares
|
(14,528
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Shares repurchased and retired
|
(910,656
|
)
|
|
(9
|
)
|
|
(16,316
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,325
|
)
|
||||||
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
2,363
|
|
|
—
|
|
|
—
|
|
|
|
|
|
2,363
|
|
||||||
Sale of non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,278
|
)
|
|
(7,278
|
)
|
||||||
Currency translation adjustment and derivative transactions, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,494
|
)
|
|
242
|
|
|
(4,252
|
)
|
||||||
BALANCE, March 31, 2016
|
35,156,241
|
|
|
$
|
352
|
|
|
$
|
186,036
|
|
|
$
|
421,782
|
|
|
$
|
(52,355
|
)
|
|
$
|
9,338
|
|
|
$
|
565,153
|
|
|
For the Quarters Ended
March 31,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
(3,949
|
)
|
|
$
|
1,372
|
|
Adjustments to reconcile to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
11,376
|
|
|
10,486
|
|
||
Gain on sale of fixed assets
|
(499
|
)
|
|
(200
|
)
|
||
Equity-based compensation expense
|
2,363
|
|
|
1,663
|
|
||
Deferred income taxes
|
(1,187
|
)
|
|
(969
|
)
|
||
Non-cash restructuring charges
|
(212
|
)
|
|
(1,359
|
)
|
||
Loss on sale of businesses
|
—
|
|
|
2,864
|
|
||
Loss on foreign currency transactions
|
1,131
|
|
|
216
|
|
||
Other
|
(485
|
)
|
|
(394
|
)
|
||
Changes in operating assets and liabilities (net of acquisitions):
|
|
|
|
||||
Restricted cash related to operating activities
|
462
|
|
|
(1,093
|
)
|
||
Receivables net, retainage and costs and estimated earnings in excess of billings
|
29,618
|
|
|
(17,442
|
)
|
||
Inventories
|
(1,806
|
)
|
|
(3,455
|
)
|
||
Prepaid expenses and other assets
|
3,382
|
|
|
2,379
|
|
||
Accounts payable and accrued expenses
|
(39,086
|
)
|
|
(24,146
|
)
|
||
Billings in excess of costs and estimated earnings
|
(3,672
|
)
|
|
16,896
|
|
||
Other operating
|
582
|
|
|
981
|
|
||
Net cash used in operating activities
|
(1,982
|
)
|
|
(12,201
|
)
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(10,060
|
)
|
|
(4,234
|
)
|
||
Proceeds from sale of fixed assets
|
956
|
|
|
297
|
|
||
Patent expenditures
|
(541
|
)
|
|
(7
|
)
|
||
Restricted cash related to investing activities
|
(1,086
|
)
|
|
—
|
|
||
Purchase of Underground Solutions, Inc., net of cash acquired
|
(85,167
|
)
|
|
—
|
|
||
Purchase of Schultz Mechanical Contractors, Inc.
|
(500
|
)
|
|
(6,479
|
)
|
||
Sale of interest in Bayou Perma-Pipe Canada, Ltd., net of cash disposed
|
4,599
|
|
|
—
|
|
||
Payment to Fyfe Asia sellers for final net working capital
|
—
|
|
|
(1,098
|
)
|
||
Net cash used in investing activities
|
(91,799
|
)
|
|
(11,521
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of common stock upon stock option exercises, including tax effects
|
38
|
|
|
1,399
|
|
||
Repurchase of common stock
|
(16,325
|
)
|
|
(7,622
|
)
|
||
Proceeds on notes payable
|
—
|
|
|
1,505
|
|
||
Proceeds from line of credit
|
34,000
|
|
|
26,000
|
|
||
Principal payments on long-term debt
|
(4,375
|
)
|
|
(33,031
|
)
|
||
Net cash provided by (used in) financing activities
|
13,338
|
|
|
(11,749
|
)
|
||
Effect of exchange rate changes on cash
|
(3,394
|
)
|
|
(3,569
|
)
|
||
Net decrease in cash and cash equivalents for the period
|
(83,837
|
)
|
|
(39,040
|
)
|
||
Cash and cash equivalents, beginning of year
|
211,696
|
|
|
174,965
|
|
||
Cash and cash equivalents, end of period
|
$
|
127,859
|
|
|
$
|
135,925
|
|
|
Quarter Ended
March 31, 2016
|
|
Quarter Ended
March 31, 2015
|
||||||||
|
Underground
Solutions
(1)
|
|
Schultz
|
|
Schultz
|
||||||
Revenues
|
$
|
4,666
|
|
|
$
|
4,710
|
|
|
$
|
517
|
|
Net loss
|
(124
|
)
|
|
(341
|
)
|
|
(7
|
)
|
(1)
|
The reported net loss for the period includes inventory step up expense of
$1.2 million
recognized as part of the accounting for business combinations.
|
(1)
|
Includes pro-forma adjustments for depreciation and amortization associated with acquired tangible and intangible assets, as if those assets were recorded at the beginning of the year preceding the acquisition date.
|
|
Underground Solutions
|
|
Schultz
|
||||
Cash
|
$
|
3,630
|
|
|
$
|
—
|
|
Receivables and cost and estimated earnings in excess of billings
|
6,373
|
|
|
1,086
|
|
||
Inventories
|
12,839
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
777
|
|
|
19
|
|
||
Property, plant and equipment
|
2,755
|
|
|
162
|
|
||
Identified intangible assets
|
34,400
|
|
|
3,060
|
|
||
Deferred income tax assets
|
12,212
|
|
|
—
|
|
||
Other assets
|
29
|
|
|
—
|
|
||
Accounts payable
|
(4,653
|
)
|
|
(663
|
)
|
||
Accrued expenses
|
(5,011
|
)
|
|
—
|
|
||
Billings in excess of cost and estimated earnings
|
(2,943
|
)
|
|
—
|
|
||
Deferred income tax liabilities
|
(15,232
|
)
|
|
—
|
|
||
Total identifiable net assets
|
$
|
45,176
|
|
|
$
|
3,664
|
|
|
|
|
|
||||
Total consideration recorded
|
$
|
88,797
|
|
|
$
|
7,662
|
|
Less: total identifiable net assets
|
45,176
|
|
|
3,664
|
|
||
Goodwill at March 31, 2016
|
$
|
43,621
|
|
|
$
|
3,998
|
|
•
|
significant underperformance of a reporting unit relative to expected, historical or forecasted operating results;
|
•
|
significant negative industry or economic trends;
|
•
|
significant changes in the strategy for a segment including extended slowdowns in the reporting unit’s market;
|
•
|
a decrease in market capitalization below the Company’s book value; and
|
•
|
a significant change in regulations.
|
•
|
determine whether the entity meets the criteria to qualify as a VIE; and
|
•
|
determine whether the Company is the primary beneficiary of the VIE.
|
•
|
the design of the entity, including the nature of its risks and the purpose for which the entity was created, to determine the variability that the entity was designed to create and distribute to its interest holders;
|
•
|
the nature of the Company’s involvement with the entity;
|
•
|
whether control of the entity may be achieved through arrangements that do not involve voting equity;
|
•
|
whether there is sufficient equity investment at risk to finance the activities of the entity; and
|
•
|
whether parties other than the equity holders have the obligation to absorb expected losses or the right to receive residual returns.
|
•
|
whether the entity has the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance; and
|
•
|
whether the entity has the obligation to absorb losses of the entity that could potentially be significant to the variable interest entity or the right to receive benefits from the entity that could potentially be significant to the variable interest entity.
|
Balance sheet data
|
March 31,
2016 (1) |
|
December 31,
2015 (2) |
||||
Current assets
|
$
|
39,951
|
|
|
$
|
60,730
|
|
Non-current assets
|
25,791
|
|
|
26,316
|
|
||
Current liabilities
|
18,203
|
|
|
24,784
|
|
||
Non-current liabilities
|
25,258
|
|
|
25,728
|
|
(1)
|
Amounts exclude the assets and liabilities of BPPC, which was sold in February 2016.
|
(2)
|
Amounts include
$21.1 million
of current assets and
$7.0 million
of current liabilities classified as held for sale. See Note 5.
|
|
Quarters Ended March 31,
|
||||||
Income statement data
|
2016
(1)
|
|
2015
|
||||
Revenue
|
$
|
14,736
|
|
|
$
|
18,240
|
|
Gross profit
|
639
|
|
|
2,206
|
|
||
Net income (loss)
|
(2,940
|
)
|
|
130
|
|
(1)
|
Includes the results of BPPC through the date of its sale in February 2016.
|
|
Quarter Ended March 31, 2016
|
||||||||||||||
|
Infrastructure
Solutions
|
|
Corrosion
Protection
|
|
Energy
Services
|
|
Total
|
||||||||
Severance and benefit related costs
|
$
|
1,912
|
|
|
$
|
2,420
|
|
|
$
|
1,309
|
|
|
$
|
5,641
|
|
Lease termination costs
|
—
|
|
|
—
|
|
|
969
|
|
|
969
|
|
||||
Relocation and other moving costs
|
—
|
|
|
—
|
|
|
120
|
|
|
120
|
|
||||
Other restructuring costs
(1)
|
241
|
|
|
317
|
|
|
2,454
|
|
|
3,012
|
|
||||
Total pre-tax restructuring charges
(2)
|
$
|
2,153
|
|
|
$
|
2,737
|
|
|
$
|
4,852
|
|
|
$
|
9,742
|
|
(1)
|
Primarily includes charges related to the downsizing of the Company's upstream operations in California.
|
(2)
|
Includes
$1.0 million
of corporate-related restructuring charges that have been allocated to the reportable segments.
|
|
Quarter Ended
March 31, 2016
|
||
Cost of revenues
|
$
|
49
|
|
Operating expenses
|
2,963
|
|
|
Restructuring charges
|
6,730
|
|
|
Total pre-tax restructuring charges
(1)
|
$
|
9,742
|
|
(1)
|
All charges incurred during the period will be settled in cash, either during the current period or future periods.
|
|
2016
Charge to Income |
|
Utilized in 2016
|
|
Reserves at
March 31, 2016 |
||||||||||
|
|
Cash
(1)
|
|
Non-Cash
|
|
||||||||||
Severance and benefit related costs
|
$
|
5,641
|
|
|
$
|
3,062
|
|
|
$
|
—
|
|
|
$
|
2,579
|
|
Lease termination costs
|
969
|
|
|
583
|
|
|
—
|
|
|
386
|
|
||||
Relocation and other moving costs
|
120
|
|
|
120
|
|
|
—
|
|
|
—
|
|
||||
Other restructuring costs
|
3,012
|
|
|
2,906
|
|
|
—
|
|
|
106
|
|
||||
Total pre-tax restructuring charges
|
$
|
9,742
|
|
|
$
|
6,671
|
|
|
$
|
—
|
|
|
$
|
3,071
|
|
(1)
|
Refers to cash utilized to settle charges during the first quarter of 2016.
|
|
Quarters Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Severance and benefit related costs
|
$
|
67
|
|
|
$
|
516
|
|
Lease termination costs
|
—
|
|
|
141
|
|
||
Allowances for doubtful accounts
|
(341
|
)
|
|
(999
|
)
|
||
Other restructuring costs
(1)
|
94
|
|
|
3,880
|
|
||
Total pre-tax restructuring charges (reversals)
(2)
|
$
|
(180
|
)
|
|
$
|
3,538
|
|
(1)
|
For the quarter ended March 31, 2015, includes charges related to the write-off of certain other assets, including the loss on the sale of the CIPP contracting operation in France in February 2015, including the release of cumulative currency translation adjustments, professional fees and certain other restructuring charges.
|
(2)
|
All charges for the quarters ended March 31, 2016 and 2015 relate to Infrastructure Solutions.
|
|
Quarters Ended March 31,
|
||||||||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||||||||
|
Other
Non-Cash Restructuring Charges (Reversals) |
|
Cash
Restructuring
Charges
(Reversals)
(1)
|
|
Total
|
|
Other
Non-Cash Restructuring Charges (Reversals) |
|
Cash
Restructuring Charges (1) |
|
Total
|
||||||||||||
Cost of revenues
|
$
|
—
|
|
|
$
|
(14
|
)
|
|
$
|
(14
|
)
|
|
$
|
(166
|
)
|
|
$
|
180
|
|
|
$
|
14
|
|
Operating expenses
|
(341
|
)
|
|
(21
|
)
|
|
(362
|
)
|
|
(1,021
|
)
|
|
1,153
|
|
|
132
|
|
||||||
Restructuring charges
|
—
|
|
|
67
|
|
|
67
|
|
|
—
|
|
|
658
|
|
|
658
|
|
||||||
Other expense
(2)
|
129
|
|
|
—
|
|
|
129
|
|
|
2,692
|
|
|
42
|
|
|
2,734
|
|
||||||
Total pre-tax restructuring charges (reversals)
(3)
|
$
|
(212
|
)
|
|
$
|
32
|
|
|
$
|
(180
|
)
|
|
$
|
1,505
|
|
|
$
|
2,033
|
|
|
$
|
3,538
|
|
(1)
|
Cash charges consist of charges incurred during the period that will be settled in cash, either during the current period or future periods.
|
(2)
|
Charges in the quarter ended March 31, 2015 primarily include the loss on sale of the CIPP contracting operation in France in February 2015, including the release of cumulative currency translation adjustments.
|
(3)
|
All charges relate to Infrastructure Solutions.
|
|
|
|
|
|
|
|
Utilized
|
|
|
||||||||||||||
|
Reserves at
December 31,
2015
|
|
Charge
(Credit)
to Income
|
|
Foreign Currency Translation
|
|
Cash
(1)
|
|
Non-Cash
|
|
Reserves at
March 31,
2016
|
||||||||||||
Severance and benefit related costs
|
$
|
—
|
|
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
67
|
|
Lease termination expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Allowances for doubtful accounts
|
6,605
|
|
|
(341
|
)
|
|
49
|
|
|
—
|
|
|
235
|
|
|
6,078
|
|
||||||
Other restructuring costs
|
968
|
|
|
94
|
|
|
33
|
|
|
45
|
|
|
129
|
|
|
921
|
|
||||||
Total pre-tax restructuring charges (reversals)
|
$
|
7,573
|
|
|
$
|
(180
|
)
|
|
$
|
82
|
|
|
$
|
45
|
|
|
$
|
364
|
|
|
$
|
7,066
|
|
(1)
|
Refers to cash utilized to settle charges, either those reserved at December 31, 2015 or charged to income during the first quarter of 2016.
|
|
|
|
|
|
|
|
Utilized
|
|
|
||||||||||||||
|
Reserves at
December 31,
2014
|
|
Charge
(Credit) to Income |
|
Foreign Currency Translation
|
|
Cash
(1)
|
|
Non-Cash
|
|
Reserves at
March 31,
2015
|
||||||||||||
Severance and benefit related costs
|
$
|
466
|
|
|
$
|
516
|
|
|
$
|
(2
|
)
|
|
$
|
82
|
|
|
$
|
—
|
|
|
$
|
898
|
|
Lease termination expenses
|
—
|
|
|
141
|
|
|
—
|
|
|
141
|
|
|
—
|
|
|
—
|
|
||||||
Allowances for doubtful accounts
|
11,464
|
|
|
(999
|
)
|
|
(1
|
)
|
|
—
|
|
|
(124
|
)
|
|
10,588
|
|
||||||
Other restructuring costs
|
2,496
|
|
|
3,880
|
|
|
(102
|
)
|
|
1,297
|
|
|
2,572
|
|
|
2,405
|
|
||||||
Total pre-tax restructuring charges
|
$
|
14,426
|
|
|
$
|
3,538
|
|
|
$
|
(105
|
)
|
|
$
|
1,520
|
|
|
$
|
2,448
|
|
|
$
|
13,891
|
|
(1)
|
Refers to cash utilized to settle charges, either those reserved at December 31, 2014 or charged to income during the first quarter of 2015.
|
|
Quarters Ended March 31,
|
||||
|
2016
|
|
2015
|
||
Weighted average number of common shares used for basic EPS
|
35,488,580
|
|
|
37,309,829
|
|
Effect of dilutive stock options and restricted and deferred stock unit awards
|
—
|
|
|
231,720
|
|
Weighted average number of common shares and dilutive potential common stock used in dilutive EPS
|
35,488,580
|
|
|
37,541,549
|
|
|
December 31,
2015
|
||
Assets held for sale:
|
|
||
Total current assets
|
$
|
8,559
|
|
Property, plant & equipment, less accumulated depreciation
|
12,501
|
|
|
Total assets held for sale
|
$
|
21,060
|
|
|
|
||
Liabilities held for sale:
|
|
||
Total current liabilities
|
$
|
944
|
|
Debt
|
1,924
|
|
|
Deferred income tax liabilities
|
1,473
|
|
|
Other liabilities
|
2,620
|
|
|
Total liabilities held for sale
|
$
|
6,961
|
|
|
|
||
Non-controlling interests
|
$
|
7,142
|
|
|
Infrastructure
Solutions |
|
Corrosion
Protection |
|
Energy
Services |
|
Total
|
||||||||
Balance, January 1, 2016
|
|
|
|
|
|
|
|
||||||||
Goodwill, gross
|
$
|
190,525
|
|
|
$
|
73,345
|
|
|
$
|
80,246
|
|
|
$
|
344,116
|
|
Accumulated impairment losses
|
(16,069
|
)
|
|
(45,400
|
)
|
|
(33,527
|
)
|
|
(94,996
|
)
|
||||
Goodwill, net
|
174,456
|
|
|
27,945
|
|
|
46,719
|
|
|
249,120
|
|
||||
Acquisitions
(1)
|
43,621
|
|
|
—
|
|
|
—
|
|
|
43,621
|
|
||||
Foreign currency translation
|
1,138
|
|
|
600
|
|
|
—
|
|
|
1,738
|
|
||||
Balance, March 31, 2016
|
|
|
|
|
|
|
|
||||||||
Goodwill, gross
|
235,284
|
|
|
73,945
|
|
|
80,246
|
|
|
389,475
|
|
||||
Accumulated impairment losses
|
(16,069
|
)
|
|
(45,400
|
)
|
|
(33,527
|
)
|
|
(94,996
|
)
|
||||
Goodwill, net
|
$
|
219,215
|
|
|
$
|
28,545
|
|
|
$
|
46,719
|
|
|
$
|
294,479
|
|
(1)
|
During the first quarter of 2016, the Company recorded goodwill of
$43.6 million
related to the acquisition of Underground Solutions (see Note 1).
|
(in thousands)
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Weighted
Average
Useful
Lives
(Years)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
License agreements
|
4.1
|
|
$
|
3,898
|
|
|
$
|
(3,320
|
)
|
|
$
|
578
|
|
|
$
|
3,893
|
|
|
$
|
(3,275
|
)
|
|
$
|
618
|
|
Leases
|
11.3
|
|
2,065
|
|
|
(801
|
)
|
|
1,264
|
|
|
2,065
|
|
|
(764
|
)
|
|
1,301
|
|
||||||
Trademarks
(1)
|
15.0
|
|
24,079
|
|
|
(6,649
|
)
|
|
17,430
|
|
|
22,519
|
|
|
(6,262
|
)
|
|
16,257
|
|
||||||
Non-competes
|
2.2
|
|
1,210
|
|
|
(972
|
)
|
|
238
|
|
|
1,210
|
|
|
(945
|
)
|
|
265
|
|
||||||
Customer relationships
(1)
|
12.5
|
|
185,222
|
|
|
(44,779
|
)
|
|
140,443
|
|
|
164,779
|
|
|
(41,967
|
)
|
|
122,812
|
|
||||||
Patents and acquired technology
(1)
|
13.7
|
|
68,492
|
|
|
(22,947
|
)
|
|
45,545
|
|
|
55,260
|
|
|
(22,395
|
)
|
|
32,865
|
|
||||||
|
|
|
$
|
284,966
|
|
|
$
|
(79,468
|
)
|
|
$
|
205,498
|
|
|
$
|
249,726
|
|
|
$
|
(75,608
|
)
|
|
$
|
174,118
|
|
(1)
|
During the first quarter of 2016, the Company recorded trademarks, customer relationships and acquired technology of
$20.2 million
,
$1.5 million
and
$12.8 million
, respectively, related to the acquisition of Underground Solutions (see Note 1).
|
2016
|
|
$
|
16,544
|
|
2017
|
|
17,040
|
|
|
2018
|
|
16,937
|
|
|
2019
|
|
16,749
|
|
|
2020
|
|
16,715
|
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
Term note, due October 30, 2020, annualized rates of 2.63% and 2.61%, respectively
|
$
|
341,250
|
|
|
$
|
345,625
|
|
Line of credit, 2.44%
|
34,000
|
|
|
—
|
|
||
Other notes with interest rates from 3.3% to 6.5%
|
9,852
|
|
|
9,797
|
|
||
Subtotal
|
385,102
|
|
|
355,422
|
|
||
Less – Current maturities and notes payable
|
17,649
|
|
|
17,648
|
|
||
Less – Unamortized loan costs
|
4,072
|
|
|
4,294
|
|
||
Total
|
$
|
363,381
|
|
|
$
|
333,480
|
|
•
|
Consolidated financial leverage ratio compares consolidated funded indebtedness to Credit Facility defined income. The initial maximum amount was not to initially exceed
3.75
to 1.00. In connection with the acquisition of Underground Solutions, the Company executed a one-time election, in accordance with the Credit Agreement, to increase the consolidated financial leverage ratio to
4.00
to 1.00 for a period of one year. After which, the ratio will decrease periodically at scheduled reporting periods to not more that
3.75
to 1.00 beginning with the quarter ending March 31, 2017. At
March 31, 2016
, the Company’s consolidated financial leverage ratio was
3.42
to 1.00 and, using the Credit Facility defined income, the Company had the capacity to borrow up to
$65.9 million
of additional debt.
|
•
|
Consolidated fixed charge coverage ratio compares Credit Facility defined income to Credit Facility defined fixed charges with a minimum permitted ratio of not less than
1.25
to 1.00. At
March 31, 2016
, the Company’s fixed charge ratio was
1.57
to 1.00.
|
|
Quarter Ended March 31, 2016
|
|||||
|
Stock Awards
|
|
Weighted
Average
Award Date
Fair Value
|
|||
Outstanding at January 1, 2016
|
1,275,707
|
|
|
$
|
19.60
|
|
Restricted shares awarded
|
—
|
|
|
—
|
|
|
Restricted stock units awarded
|
274,058
|
|
|
18.20
|
|
|
Performance stock units awarded
|
234,776
|
|
|
18.24
|
|
|
Restricted shares distributed
|
(143,993
|
)
|
|
23.65
|
|
|
Restricted stock units distributed
|
(9,733
|
)
|
|
21.58
|
|
|
Performance stock units distributed
|
—
|
|
|
—
|
|
|
Restricted shares forfeited
|
(14,528
|
)
|
|
23.40
|
|
|
Restricted stock units forfeited
|
(45,340
|
)
|
|
17.33
|
|
|
Performance stock units forfeited
|
(41,484
|
)
|
|
18.68
|
|
|
Outstanding at March 31, 2016
|
1,529,463
|
|
|
$
|
18.80
|
|
|
Quarter Ended March 31, 2016
|
|||||
|
Deferred
Stock
Units
|
|
Weighted
Average
Award Date
Fair Value
|
|||
Outstanding at January 1, 2016
|
247,219
|
|
|
$
|
19.92
|
|
Awarded
|
1,062
|
|
|
19.07
|
|
|
Distributed
|
—
|
|
|
—
|
|
|
Outstanding at March 31, 2016
|
248,281
|
|
|
$
|
19.91
|
|
|
Quarter Ended March 31, 2016
|
|||||
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|||
Outstanding at January 1, 2016
|
288,383
|
|
|
$
|
21.78
|
|
Granted
|
—
|
|
|
—
|
|
|
Exercised
|
(18,193
|
)
|
|
16.80
|
|
|
Canceled/Expired
|
—
|
|
|
—
|
|
|
Outstanding at March 31, 2016
|
270,190
|
|
|
$
|
22.06
|
|
Exercisable at March 31, 2016
|
270,190
|
|
|
$
|
22.06
|
|
|
Quarters Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Amount collected from stock option exercises
|
$
|
306
|
|
|
$
|
1,299
|
|
Total intrinsic value of stock option exercises
|
352
|
|
|
273
|
|
||
Tax shortfall of stock option exercises recorded in additional paid-in-capital
|
18
|
|
|
100
|
|
||
Aggregate intrinsic value of outstanding stock options
|
320
|
|
|
543
|
|
||
Aggregate intrinsic value of exercisable stock options
|
320
|
|
|
543
|
|
|
Quarters Ended March 31,
|
||||||
|
2016
(1)
|
|
2015
(2)
|
||||
Revenues:
|
|
|
|
||||
Infrastructure Solutions
|
$
|
125,762
|
|
|
$
|
122,473
|
|
Corrosion Protection
|
92,446
|
|
|
101,743
|
|
||
Energy Services
|
75,700
|
|
|
84,950
|
|
||
Total revenues
|
$
|
293,908
|
|
|
$
|
309,166
|
|
|
|
|
|
||||
Gross profit:
|
|
|
|
||||
Infrastructure Solutions
|
$
|
29,744
|
|
|
$
|
28,615
|
|
Corrosion Protection
|
17,199
|
|
|
20,829
|
|
||
Energy Services
|
7,471
|
|
|
9,746
|
|
||
Total gross profit
|
$
|
54,414
|
|
|
$
|
59,190
|
|
|
|
|
|
||||
Operating income (loss):
|
|
|
|
||||
Infrastructure Solutions
(3)
|
$
|
5,808
|
|
|
$
|
7,332
|
|
Corrosion Protection
(4)
|
(5,670
|
)
|
|
500
|
|
||
Energy Services
(5)
|
(4,277
|
)
|
|
1,293
|
|
||
Total operating income (loss)
|
$
|
(4,139
|
)
|
|
$
|
9,125
|
|
(1)
|
Results include: (i)
$9.7 million
of 2016 Restructuring charges (see Note 3), (ii)
$0.2 million
of 2014 Restructuring expense reversals (see Note 3); (iii)
$1.0 million
of costs incurred related to the acquisition of Underground Solutions and other acquisition targets; and (iv) inventory step up expense of
$1.2 million
recognized as part of the accounting for business combinations (see Note 1).
|
(2)
|
Results include: (i)
$0.8 million
of 2014 Restructuring charges (see Note 3); and (ii)
$0.3 million
of costs incurred related to the acquisition of Schultz and other acquisition targets.
|
(3)
|
Operating income for the quarter ended March 31, 2016 includes: (i)
$2.2 million
of 2016 Restructuring charges (see Note 3), (ii)
$0.2 million
of 2014 Restructuring expense reversals (see Note 3); (iii)
$1.0 million
of costs incurred related to the acquisitions of Underground Solutions and other acquisition targets; and (iv) inventory step up expense of
$1.2 million
recognized as part of the accounting for business combinations (see Note 1). Operating income for the quarter ended March 31, 2015 includes
$0.8 million
of 2014 Restructuring charges (see Note 3).
|
(4)
|
Operating loss for the quarter ended March 31, 2016 includes: (i)
$2.7 million
of 2016 Restructuring charges (see Note 3).
|
(5)
|
Operating loss for the quarter ended March 31, 2016 includes: (i)
$4.9 million
of 2016 Restructuring charges (see Note 3). Operating income for the quarter ended March 31, 2015 includes
$0.3 million
of costs incurred related to the acquisition of Schultz and other acquisition targets.
|
|
Quarters Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Revenues
(1)
:
|
|
|
|
||||
United States
|
$
|
223,569
|
|
|
$
|
223,141
|
|
Canada
|
27,619
|
|
|
46,651
|
|
||
Europe
|
13,821
|
|
|
14,118
|
|
||
Other foreign
|
28,899
|
|
|
25,256
|
|
||
Total revenues
|
$
|
293,908
|
|
|
$
|
309,166
|
|
|
|
|
|
||||
Gross profit:
|
|
|
|
||||
United States
|
$
|
39,862
|
|
|
$
|
37,854
|
|
Canada
|
5,414
|
|
|
12,188
|
|
||
Europe
|
2,789
|
|
|
4,225
|
|
||
Other foreign
|
6,349
|
|
|
4,923
|
|
||
Total gross profit
|
$
|
54,414
|
|
|
$
|
59,190
|
|
|
|
|
|
||||
Operating income (loss):
|
|
|
|
||||
United States
|
$
|
(7,552
|
)
|
|
$
|
(2,913
|
)
|
Canada
|
1,569
|
|
|
8,599
|
|
||
Europe
|
159
|
|
|
1,471
|
|
||
Other foreign
|
1,685
|
|
|
1,968
|
|
||
Total operating income (loss)
|
$
|
(4,139
|
)
|
|
$
|
9,125
|
|
(1)
|
Revenues are attributed to the country of origin for the Company’s legal entities. For a significant majority of its legal entities, the country of origin relates to the country or geographic area that it services.
|
|
Total Fair Value at
March 31, 2016 |
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Forward Currency Contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Forward Currency Contracts
|
$
|
1,299
|
|
|
$
|
—
|
|
|
$
|
1,299
|
|
|
$
|
—
|
|
Interest Rate Swap
|
5,055
|
|
|
—
|
|
|
5,055
|
|
|
—
|
|
||||
Total
|
$
|
6,354
|
|
|
$
|
—
|
|
|
$
|
6,354
|
|
|
$
|
—
|
|
|
Total Fair Value at
December 31, 2015 |
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Forward Currency Contracts
|
$
|
109
|
|
|
$
|
—
|
|
|
$
|
109
|
|
|
$
|
—
|
|
Total
|
$
|
109
|
|
|
$
|
—
|
|
|
$
|
109
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Forward Currency Contracts
|
$
|
243
|
|
|
$
|
—
|
|
|
$
|
243
|
|
|
$
|
—
|
|
Interest Rate Swap
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
||||
Total
|
$
|
256
|
|
|
$
|
—
|
|
|
$
|
256
|
|
|
$
|
—
|
|
|
Position
|
|
Notional
Amount
|
|
Weighted
Average
Remaining
Maturity
In Years
|
|
Average
Exchange
Rate
|
||
Canadian Dollar/USD
|
Sell
|
|
$
|
3,704,127
|
|
|
0.2
|
|
1.30
|
USD/British Pound
|
Sell
|
|
£
|
4,595,000
|
|
|
0.2
|
|
1.44
|
EURO/British Pound
|
Sell
|
|
£
|
8,000,000
|
|
|
0.2
|
|
0.79
|
Interest Rate Swap
|
|
|
$
|
255,937,500
|
|
|
4.6
|
|
|
•
|
We seek to create a diverse portfolio of near trenchless installed technologies to rehabilitate pipelines under pressure, primarily potable water, through both internal development and acquisitions to address our customers’ needs to maintain and improve their aging and damaged water and wastewater pipeline infrastructure. On February 18, 2016, we acquired Underground Solutions, Inc., adding their patented Fusible PVC
®
pipe technology to expand our presence in the pressure pipe market. We are also pursuing two internal R&D efforts to improve existing cured-in-place pipe rehabilitation products and develop a new technology specifically for the small diameter pipeline rehabilitation portion of the market. With our Fyfe
®
/Fibrwrap
®
technology for large diameter pipelines, we plan to offer our customers a broader set of trenchless rehabilitation solutions in the years to come. Our enhanced portfolio of technologies gives us a sizeable presence in a highly fragmented market in North America, with approximately $100 million in estimated 2016 revenues.
|
•
|
Our customers have a growing need to more accurately assess and manage their infrastructure assets. This is particularly the case in the midstream pipeline market given the need for safety, regulatory compliance and protecting the environment. We are investing to create an asset integrity program designed to increase the accuracy of the important pipeline corrosion assessment data we collect today and upgrade how we share this valuable information with customers. We plan to use geospatial mapping software and data management systems to interface with the database systems most commonly used by our large customers. We are also creating a robust database repository to help other customers with their integrity management systems. Our ability to automate data gathering, storage and visualization of the content we provide can improve our efficiency in operations and standardize our proposals, processes and reporting format. We seek to add over time new services in the areas of data validation, advanced analytics, predictive maintenance and improve customer regulatory compliance.
|
•
|
We strive to be a strong partner with our customers across the markets we serve. Our experience and expertise give us the ability to efficiently adopt new technologies and services to expand our abilities to solve the problems our customers face. Our strategy is to find value added and higher margin technologies and services, which complement our existing portfolio, expand our service offerings and give us the opportunity to strengthen our relationships with customers. To that end, we recently hired a chief sales officer to bring greater focus on our sales efforts across the Company.
|
(dollars in thousands)
|
Quarters Ended March 31,
|
|
Increase (Decrease)
|
|||||||||||
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Revenues
|
$
|
293,908
|
|
|
$
|
309,166
|
|
|
$
|
(15,258
|
)
|
|
(4.9
|
)%
|
Gross profit
|
54,414
|
|
|
59,190
|
|
|
(4,776
|
)
|
|
(8.1
|
)
|
|||
Gross profit margin
|
18.5
|
%
|
|
19.1
|
%
|
|
N/A
|
|
|
(60
|
)bp
|
|||
Operating expenses
|
50,725
|
|
|
49,084
|
|
|
1,641
|
|
|
3.3
|
|
|||
Acquisition-related expenses
|
1,031
|
|
|
323
|
|
|
708
|
|
|
219.2
|
|
|||
Restructuring charges
|
6,797
|
|
|
658
|
|
|
6,139
|
|
|
933.0
|
|
|||
Operating income (loss)
|
(4,139
|
)
|
|
9,125
|
|
|
(13,264
|
)
|
|
(145.4
|
)
|
|||
Operating margin
|
(1.4
|
)%
|
|
3.0
|
%
|
|
N/A
|
|
|
(440
|
)bp
|
|||
Net income (loss) attributable to Aegion Corporation
|
(3,792
|
)
|
|
1,359
|
|
|
(5,151
|
)
|
|
(379.0
|
)
|
|
March 31,
2016
|
|
December 31,
2015
|
|
March 31,
2015 |
||||||
Infrastructure Solutions
(1)
|
$
|
327.6
|
|
|
$
|
311.2
|
|
|
$
|
354.2
|
|
Corrosion Protection
|
259.9
|
|
|
272.5
|
|
|
159.3
|
|
|||
Energy Services
(2) (3)
|
169.2
|
|
|
192.8
|
|
|
238.2
|
|
|||
Total backlog
|
$
|
756.7
|
|
|
$
|
776.5
|
|
|
$
|
751.7
|
|
(1)
|
March 31, 2016, December 31, 2015 and March 31, 2015 included backlog from restructured entities of zero, $0.5 million and $7.7 million, respectively.
|
(2)
|
March 31, 2016, December 31, 2015 and March 31, 2015 included upstream-related backlog of $34.4 million, $41.1 million and $83.0 million, respectively.
|
(3)
|
Represents expected unrecognized revenues to be realized under long-term MSAs and other signed contracts. If the remaining term of these arrangements exceeds 12 months, the unrecognized revenues attributable to such arrangements included in backlog are limited to only the next 12 months of expected revenues.
|
(dollars in thousands)
|
Quarters Ended March 31,
|
|
Increase (Decrease)
|
|||||||||||
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Revenues
|
$
|
92,446
|
|
|
$
|
101,743
|
|
|
$
|
(9,297
|
)
|
|
(9.1
|
)%
|
Gross profit
|
17,199
|
|
|
20,829
|
|
|
(3,630
|
)
|
|
(17.4
|
)
|
|||
Gross profit margin
|
18.6
|
%
|
|
20.5
|
%
|
|
N/A
|
|
|
(190
|
)bp
|
|||
Operating expenses
|
20,449
|
|
|
20,329
|
|
|
120
|
|
|
0.6
|
|
|||
Restructuring charges
|
2,420
|
|
|
—
|
|
|
2,420
|
|
|
N/M
|
|
|||
Operating income (loss)
|
(5,670
|
)
|
|
500
|
|
|
(6,170
|
)
|
|
(1,234.0
|
)
|
|||
Operating margin
|
(6.1
|
)%
|
|
0.5
|
%
|
|
N/A
|
|
|
(660
|
)bp
|
(dollars in thousands)
|
Quarters Ended March 31,
|
|
Increase (Decrease)
|
|||||||||||
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Revenues
|
$
|
75,700
|
|
|
$
|
84,950
|
|
|
$
|
(9,250
|
)
|
|
(10.9
|
)%
|
Gross profit
|
7,471
|
|
|
9,746
|
|
|
(2,275
|
)
|
|
(23.3
|
)
|
|||
Gross profit margin
|
9.9
|
%
|
|
11.5
|
%
|
|
N/A
|
|
|
(160
|
)bp
|
|||
Operating expenses
|
9,350
|
|
|
8,130
|
|
|
1,220
|
|
|
15.0
|
|
|||
Acquisition-related expenses
|
—
|
|
|
323
|
|
|
(323
|
)
|
|
N/M
|
|
|||
Restructuring charges
|
2,398
|
|
|
—
|
|
|
2,398
|
|
|
N/M
|
|
|||
Operating income (loss)
|
(4,277
|
)
|
|
1,293
|
|
|
(5,570
|
)
|
|
(430.8
|
)
|
|||
Operating margin
|
(5.6
|
)%
|
|
1.5
|
%
|
|
N/A
|
|
|
(710
|
)bp
|
(in thousands)
|
March 31,
2016 |
|
December 31,
2015 |
||||
Cash and cash equivalents
|
$
|
127,859
|
|
|
$
|
209,253
|
|
Restricted cash
|
6,615
|
|
|
5,796
|
|
|
|
Total Number of Shares (or Units) Purchased
|
|
Average Price Paid per Share (or Unit)
|
|
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
|
||||||
January 2016
(1) (2)
|
|
435,798
|
|
|
$
|
17.14
|
|
|
431,128
|
|
|
$
|
7,868,694
|
|
February 2016
(1) (2)
|
|
305,328
|
|
|
17.73
|
|
|
289,632
|
|
|
3,016,659
|
|
||
March 2016
(1) (2)
|
|
169,530
|
|
|
20.30
|
|
|
137,822
|
|
|
422,066
|
|
||
Total
|
|
910,656
|
|
|
$
|
17.93
|
|
|
858,582
|
|
|
—
|
|
(1)
|
In November 2015, our board of directors authorized the open market repurchase of up to $20.0 million of our common stock to be made during 2015 and 2016. We have authorization under our Credit Facility to repurchase up to an additional $40.0 million of our common stock in 2016. In March 2016, our board of directors authorized the open market repurchase of up to an additional $20.0 million of our common stock to be made during 2016 following expiration of the November 2015 program. We began repurchasing shares under this new program in April 2016 immediately following completion of the November 2015 program. Once a repurchase is complete, we promptly retire the shares.
|
(2)
|
In connection with approval of our credit facility, our board of directors approved the purchase of up to $10.0 million of our common stock in each calendar year in connection with our equity compensation programs for employees and directors. The number of shares purchased includes shares surrendered to us to pay the exercise price and/or to satisfy tax withholding obligations in connection with “net, net” exercises of employee stock options and/or the vesting of restricted stock or restricted stock units issued to employees. For the quarter ended
March 31, 2016
,
52,074
shares were surrendered in connection with restricted stock, restricted stock unit and stock option transactions. The deemed price paid was the closing price of our common stock on the Nasdaq Global Select Market on the date that the restricted stock or restricted stock units vested or the stock option was exercised. Once a repurchase is complete, we promptly retire the shares.
|
|
AEGION CORPORATION
|
|
|
Date: May 4, 2016
|
/s/ David A. Martin
|
|
David A. Martin
|
|
Executive Vice President and Chief Financial Officer
|
|
(Principal Financial Officer)
|
10.1
|
Form of Director Deferred Stock Unit Agreement (for Non-Employee Directors), filed herewith.
(1)
|
|
|
10.2
|
Form of Amendment to Executive Change in Control Severance Agreements, dated as of May 2, 2016, between Aegion Corporation and each of Charles R. Gordon, David A. Martin and David F. Morris, filed herewith.
(1)
|
|
|
31.1
|
Certification of Charles R. Gordon pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
|
|
31.2
|
Certification of David A. Martin pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
|
|
32.1
|
Certification of Charles R. Gordon pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
|
|
32.2
|
Certification of David A. Martin pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
|
|
101.INS
|
XBRL Instance Document*
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document*
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document*
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document*
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document*
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document*
|
*
|
In accordance with Rule 406T under Regulation S-T, the XBRL-related information in Exhibit 101 shall be deemed “furnished” and not “filed”.
|
(1)
|
Management contract or compensatory plan, contract or arrangement.
|
[Aegion Logo]
|
|
Name:
Award Date:
Deferred Stock Units:
|
(i)
|
the acquisition by one person, or more than one person acting as a group, in a transaction or series of related transactions, of ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 30% of the total fair market value or total voting power of the stock of the Company; and/or
|
(ii)
|
a majority of the members of the Company’s board of directors is replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s board of directors before the date of the appointment or election; and/or
|
(iii)
|
the consummation of a merger or consolidation of the Company other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior to the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation; and/or
|
(iv)
|
the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is a consummated sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Aegion Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions)
|
/s/ Charles R. Gordon
|
Charles R. Gordon
President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Aegion Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions)
|
/s/ David A. Martin
|
David A. Martin
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
(1)
|
the Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Charles R. Gordon
|
Charles R. Gordon
President and Chief Executive Officer
(Principal Executive Officer)
|
(1)
|
the Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ David A. Martin
|
David A. Martin
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|