Aegion Corporation
|
||
(Exact name of registrant as specified in its charter)
|
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Delaware
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45-3117900
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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17988 Edison Avenue, Chesterfield, Missouri
|
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63005-1195
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(Address of principal executive offices)
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(Zip Code)
|
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|
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Registrant’s telephone number, including area code: (636) 530-8000
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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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Emerging growth company
¨
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 4A.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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||
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|
|
i.
|
adding patented Fusible PVC
®
pipe technology to our pressure pipe rehabilitation portfolio through the acquisition of Underground Solutions;
|
ii.
|
expanding our CIPP presence in Europe by acquiring the CIPP contracting operations of Leif M. Jensen A/S (“LMJ”), a Danish company and the Insituform licensee in Denmark since 2011, and acquiring Environmental Techniques Limited and its parent holding company, Killeen Trading Limited (collectively “Environmental Techniques”), a Northern Ireland-based provider of trenchless drainage inspection, cleaning and rehabilitation services throughout the United Kingdom and the Republic of Ireland;
|
iii.
|
acquiring the remaining worldwide rights that we did not already own to market, manufacture and install the patented Tyfo
®
system by acquiring the operations and territories of Fyfe Europe S.A. and related companies (“Fyfe Europe”); and
|
iv.
|
expanding our
FRP
presence in Asia Pacific through the acquisition of Concrete Solutions Limited
(“CSL”)
and Building Chemical Supplies Limited (“BCS”), two New Zealand-based companies that were the Tyfo
®
system certified applicators in New Zealand since the late 1990’s
(collectively,
“Concrete Solutions”
).
|
i.
|
On July 28, 2017, as part of the 2017 Restructuring, the Company’s board of directors approved a plan to divest our pipe coating and insulation businesses at Bayou. We are currently engaged in a process to market and sell Bayou.
|
ii.
|
In February 2016, we sold our fifty-one percent (51%) interest in BPPC to our joint venture partner, Perma-Pipe, Inc. BPPC served as our pipe coating and insulation operation in Canada. The sale of our interest in BPPC was part of a broader effort to reduce our exposure in the North American upstream market in light of expectations for a prolonged low oil price environment.
|
iii.
|
In February 2015, we sold our wholly-owned subsidiary, Video Injection - Insituform SAS (“VII”), our French CIPP contracting operation, to certain employees of VII.
|
•
|
Diversion of management time and focus from operating our business to acquisition integration challenges.
|
•
|
Failure to successfully operate and further develop the acquired business or technology.
|
•
|
Implementation or remediation of controls, procedures and policies at the acquired company.
|
•
|
Integration of the acquired company’s accounting, human resource and other administrative systems, and coordination of product, engineering and sales and marketing functions.
|
•
|
Transition of operations, users and customers onto our existing platforms.
|
•
|
Failure to obtain required approvals on a timely basis, if at all, from governmental authorities, or conditions placed upon approval, under competition and antitrust laws which could, among other things, delay or prevent us from completing a transaction, or otherwise restrict our ability to realize the expected financial or strategic goals of an acquisition.
|
•
|
In the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries.
|
•
|
Cultural challenges associated with integrating employees from the acquired company into our organization, and retention of employees from the businesses we acquire.
|
•
|
Liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities.
|
•
|
Assumption of contracts with terms, including, without limitation, terms relating to liability, waiver of damages and indemnification, that are not in line with our normal contracting practices.
|
•
|
Litigation or other claims in connection with the acquired company, including claims from terminated employees, customers, former stockholders or other third parties.
|
•
|
market prices of mined minerals, oil and natural gas and expectations about future prices;
|
•
|
cost of producing mined minerals, oil and natural gas;
|
•
|
the level of mining, drilling and production activity;
|
•
|
the discovery rate of new oil and gas reserves;
|
•
|
mergers, consolidations and downsizing among our clients;
|
•
|
coordination by the Organization of Petroleum Exporting Countries (OPEC);
|
•
|
the output and willingness to export of certain oil-producing countries;
|
•
|
the impact of commodity prices on the expenditure levels of our clients;
|
•
|
financial condition of our client base and their ability to fund capital and maintenance expenditures;
|
•
|
adverse weather conditions;
|
•
|
political instability in oil-producing countries;
|
•
|
tax incentives, including for alternative energy sources;
|
•
|
domestic and worldwide economic conditions;
|
•
|
weather conditions that can affect mining, oil or natural gas operations over a wide area;
|
•
|
availability of energy sources other than oil and gas;
|
•
|
level of consumption of minerals, oil, natural gas and petrochemicals by consumers, including the effects of increased regulation, conservation measures and technological advances affecting energy consumption; and
|
•
|
availability of services and materials for our clients to grow their capital expenditures.
|
•
|
all subject workers must be paid the applicable prevailing wage rate;
|
•
|
all subject workers must be either “skilled journeymen” or “registered apprentices”; and
|
•
|
at least 60% of skilled journeypersons on the project must be graduates of certified apprenticeship programs.
|
•
|
difficulties in enforcing agreements, collecting receivables and resolving disputes through some foreign legal systems;
|
•
|
foreign customers with longer payment cycles than customers in the United States;
|
•
|
difficulties in enforcing intellectual property rights or weaker intellectual property right protections in some countries;
|
•
|
tax rates in certain foreign countries that exceed those in the United States and foreign earnings subject to withholding requirements;
|
•
|
tax laws that restrict our ability to use tax credits, offset gains or repatriate funds;
|
•
|
tax laws that impose additional taxes on our operations, including the implementation of value added tax in certain countries in the Middle East;
|
•
|
tariffs, exchange controls or other trade restrictions, including transfer pricing restrictions, when products produced in one country are sold to an affiliated entity in another country;
|
•
|
abrupt changes in foreign government policies and regulations;
|
•
|
unsettled political conditions;
|
•
|
acts of terrorism or criminality;
|
•
|
kidnapping of employees;
|
•
|
nationalization or privatization of companies with which we do business;
|
•
|
protectionist policies in certain foreign countries, including those in the Middle East, that disfavor foreign companies operating in such countries;
|
•
|
forced negotiation or modification of contracts;
|
•
|
increased governmental ownership and regulation of markets in which we operate;
|
•
|
the financial instability of, and the related inability or unwillingness to timely pay for our services by, national oil companies and other foreign customers resulting from, and/or exacerbated by, depressed oil prices;
|
•
|
hostility from local populations, particularly in the Middle East;
|
•
|
tenuous, unstable or hostile relationships between countries that are interconnected in our operations; and
|
•
|
difficulties associated with compliance with a variety of laws and regulations governing international trade, including the Foreign Corrupt Practices Act.
|
•
|
supervising the bidding process, including providing estimates of significant cost components, such as material and equipment needs, and the size, productivity and composition of the workforce;
|
•
|
negotiating contracts;
|
•
|
supervising project performance, including performance by our employees, subcontractors and other third-party suppliers and vendors;
|
•
|
estimating costs for completion of contracts that is used to estimate amounts that can be reported as revenues and earnings on the contract under the percentage-of-completion method of accounting;
|
•
|
negotiating requests for change orders and the final terms of approved change orders; and
|
•
|
determining and documenting claims by us for increased costs incurred due to the failure of customers, subcontractors and other third-party suppliers of equipment and materials to perform on a timely basis and in
|
•
|
our estimate of the headcount requirements for various units based on our forecast of the demand for our products and services;
|
•
|
our ability to maintain our talent base and manage attrition;
|
•
|
our ability to schedule our portfolio of projects to efficiently utilize our employees and minimize downtime between project assignments; and
|
•
|
our need to invest time and resources into functions such as training, business development, employee recruiting, and sales that are not chargeable to customer projects.
|
•
|
actual or perceived disruption of service or reduction in service standards to customers;
|
•
|
the failure to preserve supplier relationships and distribution, sales and other important relationships and to resolve conflicts that may arise;
|
•
|
attrition beyond our intended reduction in headcount and reduced employee morale, which may cause our employees who were not affected by the 2017 Restructuring to seek alternate employment;
|
•
|
increased risk of employment litigation; and
|
•
|
diversion of management attention from ongoing business activities.
|
•
|
actual or anticipated variations in quarterly operating results;
|
•
|
changes in financial estimates by securities analysts that cover our stock or our failure to meet these estimates;
|
•
|
conditions or trends in the U.S. wastewater rehabilitation market;
|
•
|
conditions or trends in mined materials, oil and natural gas markets;
|
•
|
changes in municipal and corporate spending practices;
|
•
|
a downturn of the municipal bond market or lending markets generally;
|
•
|
changes in the federal or state governments that impact regulation and spending regarding energy and infrastructure;
|
•
|
changes in market valuations of other companies operating in our industries;
|
•
|
announcements by us or our competitors of a significant acquisition or divestiture; and
|
•
|
additions or departures of key personnel.
|
Charles R. Gordon
|
|
59
|
|
President and Chief Executive Officer
|
David F. Morris
|
|
56
|
|
Executive Vice President, Interim Chief Financial Officer, Chief Administrative Officer, General Counsel and Secretary
|
Michael D. White
|
|
45
|
|
Senior Vice President, Chief Accounting Officer and Corporate Controller
|
Stephen P. Callahan
|
|
51
|
|
Senior Vice President, Human Resources
|
Period
|
|
High
|
|
Low
|
||||
2017
|
|
|
|
|
||||
First Quarter
|
|
$
|
26.68
|
|
|
$
|
21.43
|
|
Second Quarter
|
|
23.94
|
|
|
19.16
|
|
||
Third Quarter
|
|
24.25
|
|
|
19.11
|
|
||
Fourth Quarter
|
|
28.19
|
|
|
19.81
|
|
||
|
|
|
|
|
||||
2016
|
|
|
|
|
||||
First Quarter
|
|
$
|
21.50
|
|
|
$
|
16.00
|
|
Second Quarter
|
|
21.95
|
|
|
17.35
|
|
||
Third Quarter
|
|
21.00
|
|
|
17.18
|
|
||
Fourth Quarter
|
|
26.14
|
|
|
17.85
|
|
Plan Category
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
(a)
|
|
Weighted-average exercise price of outstanding options, warrants and rights
(b)
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in
column (a))
(c)
|
||||
Equity compensation plans approved by security holders
(1)
|
|
1,825,535
|
|
|
$
|
19.71
|
|
|
1,619,223
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
1,825,535
|
|
|
$
|
19.71
|
|
|
1,619,223
|
|
(1)
|
The number of securities to be issued upon exercise of granted/awarded options, warrants and rights includes: (i)
126,680
stock options; (ii)
1,428,878
restricted stock, restricted stock units and restricted performance units; and (iii)
269,977
deferred stock units outstanding at
December 31, 2017
.
|
|
|
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 2017
(1) (2)
|
|
117,029
|
|
|
|
$
|
22.92
|
|
|
|
107,647
|
|
|
$
|
37,540,031
|
|
February 2017
(1) (2)
|
|
125,211
|
|
|
|
22.95
|
|
|
|
108,355
|
|
|
35,054,935
|
|
||
March 2017
(1) (2)
|
|
220,077
|
|
|
|
22.49
|
|
|
|
150,912
|
|
|
31,627,784
|
|
||
April 2017
(1) (2)
|
|
126,448
|
|
|
|
22.76
|
|
|
|
126,400
|
|
|
28,751,326
|
|
||
May 2017
(1) (2)
|
|
205,735
|
|
|
|
19.99
|
|
|
|
205,200
|
|
|
24,649,082
|
|
||
June 2017
(1) (2)
|
|
171,037
|
|
|
|
20.67
|
|
|
|
169,708
|
|
|
21,140,282
|
|
||
July 2017
(1) (2)
|
|
152,479
|
|
|
|
23.17
|
|
|
|
149,100
|
|
|
17,682,708
|
|
||
August 2017
(1) (2)
|
|
179,652
|
|
|
|
20.66
|
|
|
|
178,810
|
|
|
13,988,740
|
|
||
September 2017
(1) (2)
|
|
154,628
|
|
|
|
22.25
|
|
|
|
150,000
|
|
|
10,645,225
|
|
||
October 2017
(1) (2)
|
|
169,497
|
|
|
|
22.54
|
|
|
|
165,100
|
|
|
6,924,663
|
|
||
November 2017
(1) (2)
|
|
38,224
|
|
|
|
25.65
|
|
|
|
37,700
|
|
|
5,956,757
|
|
||
December 2017
(1) (2) (3)
|
|
51,975
|
|
|
|
25.38
|
|
|
|
50,161
|
|
|
—
|
|
||
Total
|
|
1,711,992
|
|
|
|
$
|
22.10
|
|
|
|
1,599,093
|
|
|
|
(1)
|
In October 2016, our board of directors authorized the open market repurchase of up to $40.0 million of our common stock to be made during 2017. We began repurchasing shares under this program in January 2017 and ceased on December 31, 2017 due to expiration of the program. Once repurchased, we promptly retired the shares.
|
(2)
|
In connection with approval of our then current 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 deferred stock units issued to employees and directors. During
2017
,
zero
shares were surrendered in connection with stock swap transactions and
112,899
shares were surrendered in connection with restricted stock and restricted stock unit 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.
|
(3)
|
In October 2017, our board of directors authorized the open market repurchase of up to $40.0 million of our common stock to be made during 2018. Any shares repurchased will be pursuant to one or more 10b5-1 plans. The program will expire on the earlier of: (i) December 31, 2018; (ii) the repurchase by the Company of $40.0 million of common stock pursuant to the program; or (iii) the board of directors’ termination of the program. On February 27, 2018, we amended our senior secured credit facility, which limits the open market repurchase of our common stock to be made during 2018 to $30.0 million.
|
Actuant Corporation
|
Matrix Service Company
|
Barnes Group, Inc.
|
McDermott International Inc.
|
CIRCOR International, Inc.
|
Mistras Group, Inc.
|
Dril-Quip, Inc.
|
Newpark Resources, Inc.
|
Forum Energy Technologies, Inc.
|
Oil States International Inc.
|
Granite Construction Incorporated
|
Team, Inc.
|
Helix Energy Solutions Group, Inc.
|
Tetra Tech, Inc.
|
Kennametal, Inc.
|
Valmont Industries, Inc.
|
MasTec, Inc.
|
Willbros Group, Inc.
|
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||||||||
Aegion Corporation
|
|
$
|
100.00
|
|
|
$
|
98.65
|
|
|
$
|
83.87
|
|
|
$
|
87.02
|
|
|
$
|
106.80
|
|
|
$
|
114.60
|
|
S&P 500 Total Returns
|
|
100.00
|
|
|
132.39
|
|
|
150.51
|
|
|
152.59
|
|
|
170.84
|
|
|
208.14
|
|
||||||
Peer Group
|
|
100.00
|
|
|
126.70
|
|
|
99.40
|
|
|
73.80
|
|
|
107.71
|
|
|
112.04
|
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
|
2017
(1)
|
|
2016
(2)
|
|
2015
(3)
|
|
2014
(4)
|
|
2013
(5)
|
||||||||||
|
|
(In thousands, except per share amounts)
|
||||||||||||||||||
STATEMENT OF OPERATIONS DATA:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
1,359,019
|
|
|
$
|
1,221,920
|
|
|
$
|
1,333,570
|
|
|
$
|
1,331,421
|
|
|
$
|
1,091,420
|
|
Operating income (loss)
|
|
(43,173
|
)
|
|
50,826
|
|
|
19,946
|
|
|
(19,812
|
)
|
|
66,882
|
|
|||||
Income (loss) from continuing operations
(6)
|
|
(69,054
|
)
|
|
29,488
|
|
|
(8,067
|
)
|
|
(33,320
|
)
|
|
50,812
|
|
|||||
Loss from discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,847
|
)
|
|
(6,461
|
)
|
|||||
Net income (loss)
(6)
|
|
(69,054
|
)
|
|
29,488
|
|
|
(8,067
|
)
|
|
(37,167
|
)
|
|
44,351
|
|
|||||
Basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income (loss) from continuing operations
(6)
|
|
(2.08
|
)
|
|
0.85
|
|
|
(0.22
|
)
|
|
(0.88
|
)
|
|
1.31
|
|
|||||
Loss from discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.10
|
)
|
|
(0.17
|
)
|
|||||
Net income (loss)
(6)
|
|
(2.08
|
)
|
|
0.85
|
|
|
(0.22
|
)
|
|
(0.98
|
)
|
|
1.14
|
|
|||||
Diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income (loss) from continuing operations
(6)
|
|
(2.08
|
)
|
|
0.84
|
|
|
(0.22
|
)
|
|
(0.88
|
)
|
|
1.30
|
|
|||||
Loss from discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.10
|
)
|
|
(0.17
|
)
|
|||||
Net income (loss)
(6)
|
|
(2.08
|
)
|
|
0.84
|
|
|
(0.22
|
)
|
|
(0.98
|
)
|
|
1.13
|
|
|||||
BALANCE SHEET DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
|
$
|
105,717
|
|
|
$
|
129,500
|
|
|
$
|
209,253
|
|
|
$
|
174,965
|
|
|
$
|
158,045
|
|
Working capital, net of cash
|
|
219,673
|
|
|
172,136
|
|
|
171,176
|
|
|
198,834
|
|
|
210,858
|
|
|||||
Current assets
(7)
|
|
587,064
|
|
|
532,237
|
|
|
678,196
|
|
|
638,122
|
|
|
603,858
|
|
|||||
Property, plant and equipment, net
|
|
109,040
|
|
|
156,747
|
|
|
144,833
|
|
|
168,213
|
|
|
182,303
|
|
|||||
Goodwill
|
|
260,715
|
|
|
298,619
|
|
|
249,120
|
|
|
293,023
|
|
|
348,680
|
|
|||||
Identified intangible assets, net
|
|
132,345
|
|
|
194,911
|
|
|
174,118
|
|
|
182,273
|
|
|
209,283
|
|
|||||
Total assets
(7)
|
|
1,107,099
|
|
|
1,193,582
|
|
|
1,254,013
|
|
|
1,291,133
|
|
|
1,372,332
|
|
|||||
Current maturities of long-term debt
|
|
26,555
|
|
|
19,835
|
|
|
17,648
|
|
|
26,399
|
|
|
22,024
|
|
|||||
Long-term debt, less current maturities
|
|
318,240
|
|
|
350,785
|
|
|
333,480
|
|
|
346,536
|
|
|
361,530
|
|
|||||
Total liabilities
(7)
|
|
602,043
|
|
|
617,399
|
|
|
659,457
|
|
|
646,048
|
|
|
645,411
|
|
|||||
Total stockholders’ equity
|
|
494,246
|
|
|
568,500
|
|
|
578,025
|
|
|
626,635
|
|
|
709,368
|
|
(1)
|
2017 results include charges of
$24.0 million
related to our restructuring efforts,
$86.4 million
related to certain goodwill and definite-lived intangible asset impairments, and
$2.9 million
in acquisition and divestiture expenses related to our acquisition of Environmental Techniques and our planned divestiture of Bayou. Results also include tax expenses of $2.4 million related to impacts from the
TCJA
.
|
(2)
|
2016 results include charges of
$15.9 million
related to our restructuring efforts and
$2.7 million
in acquisition expenses related to our acquisitions of Underground Solutions, Fyfe Europe, Concrete Solutions, LMJ and diligence on other targets. Results also include a gain of
$6.6 million
in connection with the settlement of two longstanding lawsuits.
|
(3)
|
2015 results include charges of $11.0 million related to our restructuring efforts, $43.5 million related to certain goodwill impairments, and $1.9 million in acquisition expenses related to our acquisitions of Schultz, Underground Solutions and diligence on other targets. Results also include $3.4 million related to expenses associated with the Credit Facility and our write-off of unamortized debt issuance costs from our prior credit facility.
|
(4)
|
2014 results include charges of $49.5 million related to our restructuring efforts, $52.7 million related to certain goodwill and definite-lived intangible asset impairments, and $1.4 million in acquisition expenses related to our acquisition of Brinderson and diligence on other targets. Results also include $4.5 million in proceeds received in connection with the settlement of escrow claims related to the purchase of Brinderson.
|
(5)
|
2013 results include $5.8 million in acquisition expenses related to our acquisition of Brinderson and diligence on other targets.
|
(6)
|
All periods presented include amounts attributable to Aegion Corporation.
|
(7)
|
2014 and 2013 amounts also include certain components of discontinued operations.
|
i.
|
adding patented Fusible PVC
®
pipe technology to our pressure pipe rehabilitation portfolio through the acquisition of Underground Solutions;
|
ii.
|
expanding our CIPP presence in Europe by acquiring the CIPP contracting operations of Leif M. Jensen A/S (“LMJ”), a Danish company and the Insituform licensee in Denmark since 2011, and acquiring Environmental Techniques Limited and its parent holding company, Killeen Trading Limited (collectively “Environmental Techniques”), a Northern Ireland-based provider of trenchless drainage inspection, cleaning and rehabilitation services throughout the United Kingdom and the Republic of Ireland;
|
iii.
|
acquiring the remaining worldwide rights that we did not already own to market, manufacture and install the patented Tyfo
®
system by acquiring the operations and territories of Fyfe Europe S.A. and related companies (“Fyfe Europe”); and
|
iv.
|
expanding our
FRP
presence in Asia Pacific through the acquisition of Concrete Solutions Limited
(“CSL”)
and Building Chemical Supplies Limited (“BCS”), two New Zealand-based companies that were the Tyfo
®
system certified applicators in New Zealand since the late 1990’s
(collectively,
“Concrete Solutions”
).
|
i.
|
On July 28, 2017, as part of the 2017 Restructuring, our board of directors approved a plan to divest our pipe coating and insulation businesses in Louisiana. We are currently engaged in a process to sell the businesses. As of December 31, 2017, the assets and liabilities of these businesses were classified as held for sale on our consolidated balance sheet. If we are unable to sell these businesses or if we dispose of them at a price or on terms that are less favorable, or at a higher cost, than we currently anticipate, we could incur impairment charges or losses on disposal.
|
ii.
|
In February 2016, we sold our fifty-one percent (51%) interest in BPPC to our joint venture partner, Perma-Pipe, Inc. BPPC served as our pipe coating and insulation operation in Canada. The sale of our interest in BPPC was part of a broader effort to reduce our exposure in the North American upstream market in light of expectations for a prolonged low oil price environment.
|
iii.
|
In February 2015, we sold our wholly-owned subsidiary, Video Injection - Insituform SAS (“VII”), our French CIPP contracting operation, to certain employees of VII.
|
|
|
|
|
|
|
|
2017 vs 2016
|
|
2016 vs 2015
|
||||||||||||||||
(dollars in thousands)
|
Years Ended December 31,
|
|
Increase (Decrease)
|
|
Increase (Decrease)
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
Revenues
|
$
|
1,359,019
|
|
|
$
|
1,221,920
|
|
|
$
|
1,333,570
|
|
|
$
|
137,099
|
|
|
11.2
|
%
|
|
$
|
(111,650
|
)
|
|
(8.4
|
)%
|
Gross profit
|
284,812
|
|
|
253,164
|
|
|
275,787
|
|
|
31,648
|
|
|
12.5
|
|
|
(22,623
|
)
|
|
(8.2
|
)
|
|||||
Gross profit margin
|
21.0
|
%
|
|
20.7
|
%
|
|
20.7
|
%
|
|
N/A
|
|
|
30
|
bp
|
|
N/A
|
|
|
—
|
|
|||||
Operating expenses
|
225,826
|
|
|
197,099
|
|
|
209,477
|
|
|
28,727
|
|
|
14.6
|
|
|
(12,378
|
)
|
|
(5.9
|
)
|
|||||
Goodwill impairment
|
45,390
|
|
|
—
|
|
|
43,484
|
|
|
45,390
|
|
|
N/M
|
|
|
(43,484
|
)
|
|
N/M
|
|
|||||
Definite-lived intangible asset impairment
|
41,032
|
|
|
—
|
|
|
—
|
|
|
41,032
|
|
|
N/M
|
|
|
—
|
|
|
N/M
|
|
|||||
Gain on litigation settlement
|
—
|
|
|
(6,625
|
)
|
|
—
|
|
|
6,625
|
|
|
N/M
|
|
|
(6,625
|
)
|
|
N/M
|
|
|||||
Acquisition and divestiture expenses
|
2,923
|
|
|
2,696
|
|
|
1,912
|
|
|
227
|
|
|
8.4
|
|
|
784
|
|
|
41.0
|
|
|||||
Restructuring and related charges
1
|
12,814
|
|
|
9,168
|
|
|
968
|
|
|
3,646
|
|
|
39.8
|
|
|
8,200
|
|
|
847.1
|
|
|||||
Operating income (loss)
|
(43,173
|
)
|
|
50,826
|
|
|
19,946
|
|
|
(93,999
|
)
|
|
(184.9
|
)
|
|
30,880
|
|
|
154.8
|
|
|||||
Operating margin
|
(3.2
|
)%
|
|
4.2
|
%
|
|
1.5
|
%
|
|
N/A
|
|
|
(740
|
)bp
|
|
N/A
|
|
|
270
|
bp
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss) attributable to Aegion Corporation
|
(69,054
|
)
|
|
29,488
|
|
|
(8,067
|
)
|
|
(98,542
|
)
|
|
(334.2
|
)
|
|
37,555
|
|
|
465.5
|
|
|
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Infrastructure Solutions
|
$
|
328.9
|
|
|
$
|
283.4
|
|
|
$
|
311.2
|
|
Corrosion Protection
(1)
|
155.7
|
|
|
213.4
|
|
|
272.5
|
|
|||
Energy Services
|
207.8
|
|
|
192.8
|
|
|
192.8
|
|
|||
Total backlog
|
$
|
692.4
|
|
|
$
|
689.6
|
|
|
$
|
776.5
|
|
(1)
|
December 31, 2017, 2016 and 2015 included backlog from our large domestic pipe coating and insulation contract of
$3.5 million
,
$96.8 million
and
$134.3 million
, respectively.
|
|
|
|
|
|
|
|
2017 vs 2016
|
|
2016 vs 2015
|
||||||||||||||||
(dollars in thousands)
|
Years Ended December 31,
|
|
Increase (Decrease)
|
|
Increase (Decrease)
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
Revenues
|
$
|
612,154
|
|
|
$
|
571,551
|
|
|
$
|
556,234
|
|
|
$
|
40,603
|
|
|
7.1
|
%
|
|
$
|
15,317
|
|
|
2.8
|
%
|
Gross profit
|
140,823
|
|
|
141,681
|
|
|
139,895
|
|
|
(858
|
)
|
|
(0.6
|
)
|
|
1,786
|
|
|
1.3
|
|
|||||
Gross profit margin
|
23.0
|
%
|
|
24.8
|
%
|
|
25.2
|
%
|
|
N/A
|
|
|
(180
|
)bp
|
|
N/A
|
|
|
(40
|
)bp
|
|||||
Operating expenses
|
106,397
|
|
|
89,477
|
|
|
90,928
|
|
|
16,920
|
|
|
18.9
|
|
|
(1,451
|
)
|
|
(1.6
|
)
|
|||||
Goodwill impairment
|
45,390
|
|
|
—
|
|
|
—
|
|
|
45,390
|
|
|
N/M
|
|
|
—
|
|
|
N/M
|
|
|||||
Definite-lived intangible asset impairment
|
41,032
|
|
|
—
|
|
|
—
|
|
|
41,032
|
|
|
N/M
|
|
|
—
|
|
|
N/M
|
|
|||||
Gain on litigation settlement
|
—
|
|
|
(6,625
|
)
|
|
—
|
|
|
6,625
|
|
|
N/M
|
|
|
(6,625
|
)
|
|
N/M
|
|
|||||
Acquisition and divestiture expenses
|
651
|
|
|
2,696
|
|
|
1,132
|
|
|
(2,045
|
)
|
|
(75.9
|
)
|
|
1,564
|
|
|
138.2
|
|
|||||
Restructuring and related charges
1
|
9,160
|
|
|
2,630
|
|
|
968
|
|
|
6,530
|
|
|
248.3
|
|
|
1,662
|
|
|
171.7
|
|
|||||
Operating income (loss)
|
(61,807
|
)
|
|
53,503
|
|
|
46,867
|
|
|
(115,310
|
)
|
|
(215.5
|
)
|
|
6,636
|
|
|
14.2
|
|
|||||
Operating margin
|
(10.1
|
)%
|
|
9.4
|
%
|
|
8.4
|
%
|
|
N/A
|
|
|
(1,950
|
)bp
|
|
N/A
|
|
|
100
|
bp
|
|
|
|
|
|
|
|
2017 vs 2016
|
|
2016 vs 2015
|
||||||||||||||||
(dollars in thousands)
|
Years Ended December 31,
|
|
Increase (Decrease)
|
|
Increase (Decrease)
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
Revenues
|
$
|
456,139
|
|
|
$
|
401,469
|
|
|
$
|
437,921
|
|
|
$
|
54,670
|
|
|
13.6
|
%
|
|
$
|
(36,452
|
)
|
|
(8.3
|
)%
|
Gross profit
|
108,240
|
|
|
83,269
|
|
|
93,220
|
|
|
24,971
|
|
|
30.0
|
|
|
(9,951
|
)
|
|
(10.7
|
)
|
|||||
Gross profit margin
|
23.7
|
%
|
|
20.7
|
%
|
|
21.3
|
%
|
|
N/A
|
|
|
300
|
bp
|
|
N/A
|
|
|
(60
|
)bp
|
|||||
Operating expenses
|
89,877
|
|
|
77,657
|
|
|
84,577
|
|
|
12,220
|
|
|
15.7
|
|
|
(6,920
|
)
|
|
(8.2
|
)
|
|||||
Goodwill impairment
|
—
|
|
|
—
|
|
|
9,957
|
|
|
—
|
|
|
N/M
|
|
|
(9,957
|
)
|
|
N/M
|
|
|||||
Acquisition and divestiture expenses
|
2,272
|
|
|
—
|
|
|
457
|
|
|
2,272
|
|
|
N/M
|
|
|
(457
|
)
|
|
N/M
|
|
|||||
Restructuring and related charges
1
|
3,654
|
|
|
3,803
|
|
|
—
|
|
|
(149
|
)
|
|
(3.9
|
)
|
|
3,803
|
|
|
N/M
|
|
|||||
Operating income (loss)
|
12,437
|
|
|
1,809
|
|
|
(1,771
|
)
|
|
10,628
|
|
|
587.5
|
|
|
3,580
|
|
|
(202.1
|
)
|
|||||
Operating margin
|
2.7
|
%
|
|
0.5
|
%
|
|
(0.4
|
)%
|
|
N/A
|
|
|
220
|
bp
|
|
N/A
|
|
|
90
|
bp
|
|
|
|
|
|
|
|
2017 vs 2016
|
|
2016 vs 2015
|
||||||||||||||||
(dollars in thousands)
|
Years Ended December 31,
|
|
Increase (Decrease)
|
|
Increase (Decrease)
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
Revenues
|
$
|
290,726
|
|
|
$
|
248,900
|
|
|
$
|
339,415
|
|
|
$
|
41,826
|
|
|
16.8
|
%
|
|
$
|
(90,515
|
)
|
|
(26.7
|
)%
|
Gross profit
|
35,749
|
|
|
28,214
|
|
|
42,672
|
|
|
7,535
|
|
|
26.7
|
|
|
(14,458
|
)
|
|
(33.9
|
)
|
|||||
Gross profit margin
|
12.3
|
%
|
|
11.3
|
%
|
|
12.6
|
%
|
|
N/A
|
|
|
100
|
bp
|
|
N/A
|
|
|
(130
|
)bp
|
|||||
Operating expenses
|
29,552
|
|
|
29,965
|
|
|
33,972
|
|
|
(413
|
)
|
|
(1.4
|
)
|
|
(4,007
|
)
|
|
(11.8
|
)
|
|||||
Goodwill impairment
|
—
|
|
|
—
|
|
|
33,527
|
|
|
—
|
|
|
N/M
|
|
|
(33,527
|
)
|
|
N/M
|
|
|||||
Acquisition and divestiture expenses
|
—
|
|
|
—
|
|
|
323
|
|
|
—
|
|
|
N/M
|
|
|
(323
|
)
|
|
N/M
|
|
|||||
Restructuring and related charges
1
|
—
|
|
|
2,735
|
|
|
—
|
|
|
(2,735
|
)
|
|
N/M
|
|
|
2,735
|
|
|
N/M
|
|
|||||
Operating income (loss)
|
6,197
|
|
|
(4,486
|
)
|
|
(25,150
|
)
|
|
10,683
|
|
|
238.1
|
|
|
20,664
|
|
|
(82.2
|
)
|
|||||
Operating margin
|
2.1
|
%
|
|
(1.8
|
)%
|
|
(7.4
|
)%
|
|
N/A
|
|
|
390
|
bp
|
|
N/A
|
|
|
560
|
bp
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Cash and cash equivalents
|
$
|
105,717
|
|
|
$
|
129,500
|
|
Restricted cash
|
1,839
|
|
|
4,892
|
|
|
Payments Due by Period
|
||||||||||||||||||||||||||
Cash Obligations
(1) (2) (3) (4) (5) (6)
|
Total
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
||||||||||||||
Long-term debt and notes payable
|
$
|
347,312
|
|
|
$
|
26,555
|
|
|
$
|
28,437
|
|
|
$
|
292,320
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest on long-term debt
|
32,567
|
|
|
12,655
|
|
|
11,327
|
|
|
8,585
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Operating leases
|
70,283
|
|
|
21,084
|
|
|
16,336
|
|
|
11,652
|
|
|
8,148
|
|
|
5,245
|
|
|
7,818
|
|
|||||||
Total contractual cash obligations
|
$
|
450,162
|
|
|
$
|
60,294
|
|
|
$
|
56,100
|
|
|
$
|
312,557
|
|
|
$
|
8,148
|
|
|
$
|
5,245
|
|
|
$
|
7,818
|
|
(1)
|
Cash obligations are not discounted. See Notes 7 and 11 to the consolidated financial statements contained in this Report regarding our long-term debt and Credit Facility and commitments and contingencies, respectively.
|
(2)
|
Interest on long-term debt was calculated using the current annualized rate on our long-term debt as discussed in Note 7 to the consolidated financial statements contained in this Report.
|
(3)
|
Liabilities related to Financial Accounting Standards Board Accounting Standards Codification 740,
Income Taxes,
have not been included in the table above because we are uncertain as to if or when such amounts may be settled. As of December 31, 2017, we had income tax receivable and income tax payable of $2.3 million and $4.6 million, respectively, recorded on our consolidated balance sheet.
|
(4)
|
There were no material purchase commitments at
December 31, 2017
.
|
(5)
|
Amounts exclude approximately
$5.0 million
to
$7.0 million
of cash charges expected to be incurred in 2018 related to the 2017 Restructuring and estimated charges resulting from the TCJA of $0.8 million in each year between 2018 and 2022, $1.6 million in 2023, $2.1 million in 2024 and $2.7 million in 2025.
|
(6)
|
See Note 15 to the consolidated financial statements contained in this Report regarding the amended Credit Facility.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Charles R. Gordon
|
|
Charles R. Gordon
President and Chief Executive Officer
(Principal Executive Officer)
|
|
/s/ David F. Morris
|
|
David F. Morris
Executive Vice President, General Counsel and
Interim Chief Financial Officer
(Principal Financial Officer)
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
$
|
1,359,019
|
|
|
$
|
1,221,920
|
|
|
$
|
1,333,570
|
|
Cost of revenues
|
1,074,207
|
|
|
968,756
|
|
|
1,057,783
|
|
|||
Gross profit
|
284,812
|
|
|
253,164
|
|
|
275,787
|
|
|||
Operating expenses
|
225,826
|
|
|
197,099
|
|
|
209,477
|
|
|||
Goodwill impairment
|
45,390
|
|
|
—
|
|
|
43,484
|
|
|||
Definite-lived intangible asset impairment
|
41,032
|
|
|
—
|
|
|
—
|
|
|||
Gain on litigation settlement
|
—
|
|
|
(6,625
|
)
|
|
—
|
|
|||
Acquisition and divestiture expenses
|
2,923
|
|
|
2,696
|
|
|
1,912
|
|
|||
Restructuring and related charges
|
12,814
|
|
|
9,168
|
|
|
968
|
|
|||
Operating income (loss)
|
(43,173
|
)
|
|
50,826
|
|
|
19,946
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(16,001
|
)
|
|
(15,029
|
)
|
|
(16,044
|
)
|
|||
Interest income
|
145
|
|
|
166
|
|
|
218
|
|
|||
Other
|
(2,201
|
)
|
|
(694
|
)
|
|
(2,905
|
)
|
|||
Total other expense
|
(18,057
|
)
|
|
(15,557
|
)
|
|
(18,731
|
)
|
|||
Income (loss) before taxes on income
|
(61,230
|
)
|
|
35,269
|
|
|
1,215
|
|
|||
Taxes on income (loss)
|
5,005
|
|
|
6,109
|
|
|
9,205
|
|
|||
Net income (loss)
|
(66,235
|
)
|
|
29,160
|
|
|
(7,990
|
)
|
|||
Non-controlling interests (income) loss
|
(2,819
|
)
|
|
328
|
|
|
(77
|
)
|
|||
Net income (loss) attributable to Aegion Corporation
|
$
|
(69,054
|
)
|
|
$
|
29,488
|
|
|
$
|
(8,067
|
)
|
|
|
|
|
|
|
||||||
Earnings (loss) per share attributable to Aegion Corporation:
|
|
|
|
|
|
||||||
Basic
|
$
|
(2.08
|
)
|
|
$
|
0.85
|
|
|
$
|
(0.22
|
)
|
Diluted
|
$
|
(2.08
|
)
|
|
$
|
0.84
|
|
|
$
|
(0.22
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income (loss)
|
$
|
(66,235
|
)
|
|
$
|
29,160
|
|
|
$
|
(7,990
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Currency translation adjustments
|
19,390
|
|
|
(6,343
|
)
|
|
(25,379
|
)
|
|||
Deferred gain on hedging activity, net of tax
(1)
|
1,402
|
|
|
746
|
|
|
279
|
|
|||
Pension activity, net of tax
(2)
|
93
|
|
|
(8
|
)
|
|
145
|
|
|||
Total comprehensive income (loss)
|
(45,350
|
)
|
|
23,555
|
|
|
(32,945
|
)
|
|||
Comprehensive (income) loss attributable to non-controlling interests
|
(3,040
|
)
|
|
294
|
|
|
1,686
|
|
|||
Comprehensive income (loss) attributable to Aegion Corporation
|
$
|
(48,390
|
)
|
|
$
|
23,849
|
|
|
$
|
(31,259
|
)
|
(1)
|
Amounts presented net of tax of
$930
,
$496
and
$187
for the years ended December 31, 2017, 2016 and 2015, respectively.
|
(2)
|
Amounts presented net of tax of
$22
,
$(2)
and
$37
for the years ended December 31, 2017, 2016, and 2015, respectively.
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
105,717
|
|
|
$
|
129,500
|
|
Restricted cash
|
1,839
|
|
|
4,892
|
|
||
Receivables, net of allowances of $5,775 and $6,098, respectively
|
201,570
|
|
|
186,016
|
|
||
Retainage
|
33,002
|
|
|
33,643
|
|
||
Costs and estimated earnings in excess of billings
|
75,371
|
|
|
62,401
|
|
||
Inventories
|
63,969
|
|
|
63,953
|
|
||
Prepaid expenses and other current assets
|
35,282
|
|
|
51,832
|
|
||
Assets held for sale
|
70,314
|
|
|
—
|
|
||
Total current assets
|
587,064
|
|
|
532,237
|
|
||
Property, plant & equipment, less accumulated depreciation
|
109,040
|
|
|
156,747
|
|
||
Other assets
|
|
|
|
||||
Goodwill
|
260,715
|
|
|
298,619
|
|
||
Identified intangible assets, less accumulated amortization
|
132,345
|
|
|
194,911
|
|
||
Deferred income tax assets
|
1,666
|
|
|
1,848
|
|
||
Other assets
|
16,269
|
|
|
9,220
|
|
||
Total other assets
|
410,995
|
|
|
504,598
|
|
||
Total Assets
|
$
|
1,107,099
|
|
|
$
|
1,193,582
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
70,611
|
|
|
$
|
63,058
|
|
Accrued expenses
|
92,011
|
|
|
85,010
|
|
||
Billings in excess of costs and estimated earnings
|
51,597
|
|
|
62,698
|
|
||
Current maturities of long-term debt
|
26,555
|
|
|
19,835
|
|
||
Liabilities held for sale
|
20,900
|
|
|
—
|
|
||
Total current liabilities
|
261,674
|
|
|
230,601
|
|
||
Long-term debt, less current maturities
|
318,240
|
|
|
350,785
|
|
||
Deferred income tax liabilities
|
9,211
|
|
|
23,339
|
|
||
Other non-current liabilities
|
12,918
|
|
|
12,674
|
|
||
Total liabilities
|
602,043
|
|
|
617,399
|
|
||
|
|
|
|
||||
(See Commitments and Contingencies: Note 11)
|
|
|
|
|
|
||
|
|
|
|
||||
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 32,462,542 and 33,956,304, respectively
|
325
|
|
|
340
|
|
||
Additional paid-in capital
|
140,749
|
|
|
166,598
|
|
||
Retained earnings
|
386,008
|
|
|
455,062
|
|
||
Accumulated other comprehensive loss
|
(32,836
|
)
|
|
(53,500
|
)
|
||
Total stockholders’ equity
|
494,246
|
|
|
568,500
|
|
||
Non-controlling interests
|
10,810
|
|
|
7,683
|
|
||
Total equity
|
505,056
|
|
|
576,183
|
|
||
Total Liabilities and Equity
|
$
|
1,107,099
|
|
|
$
|
1,193,582
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (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 (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,067
|
)
|
|
—
|
|
|
77
|
|
|
(7,990
|
)
|
||||||
Issuance of common stock upon stock option exercises, including tax benefit
|
209,205
|
|
|
2
|
|
|
2,464
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,466
|
|
||||||
Issuance of shares pursuant to restricted stock units
|
12,646
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of shares pursuant to deferred stock unit awards
|
27,779
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Forfeitures of restricted shares
|
(54,045
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
Shares repurchased and retired
|
(1,502,601
|
)
|
|
(14
|
)
|
|
(27,789
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27,803
|
)
|
||||||
Equity-based compensation expense
|
—
|
|
|
|
|
|
7,987
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,987
|
|
||||||
Investment by non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
239
|
|
|
239
|
|
||||||
Purchase of non-controlling interests
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(472
|
)
|
|
(472
|
)
|
||||||
Currency translation adjustment and derivative transactions, net
|
—
|
|
|
|
|
|
|
|
|
—
|
|
|
(23,192
|
)
|
|
(1,763
|
)
|
|
(24,955
|
)
|
||||||
BALANCE, December 31, 2015
|
36,053,499
|
|
|
$
|
361
|
|
|
$
|
199,951
|
|
|
$
|
425,574
|
|
|
$
|
(47,861
|
)
|
|
$
|
16,531
|
|
|
$
|
594,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
29,488
|
|
|
—
|
|
|
(328
|
)
|
|
29,160
|
|
||||||
Issuance of common stock upon stock option exercises, including tax benefit
|
114,307
|
|
|
1
|
|
|
1,817
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,818
|
|
||||||
Issuance of shares pursuant to restricted stock units
|
141,507
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Issuance of shares pursuant to deferred stock unit awards
|
39,660
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Forfeitures of restricted shares
|
(42,775
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Shares repurchased and retired
|
(2,349,894
|
)
|
|
(23
|
)
|
|
(44,431
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(44,454
|
)
|
||||||
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
9,261
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,261
|
|
||||||
Sale of non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,278
|
)
|
|
(7,278
|
)
|
||||||
Distributions to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,276
|
)
|
|
(1,276
|
)
|
||||||
Currency translation adjustment and derivative transactions, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,639
|
)
|
|
34
|
|
|
(5,605
|
)
|
||||||
BALANCE, December 31, 2016
|
33,956,304
|
|
|
$
|
340
|
|
|
$
|
166,598
|
|
|
$
|
455,062
|
|
|
$
|
(53,500
|
)
|
|
$
|
7,683
|
|
|
$
|
576,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(69,054
|
)
|
|
—
|
|
|
2,819
|
|
|
(66,235
|
)
|
||||||
Issuance of common stock upon stock option exercises
|
43,573
|
|
|
—
|
|
|
822
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
822
|
|
||||||
Issuance of shares pursuant to restricted stock units
|
95,510
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Issuance of shares pursuant to performance units
|
49,672
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of shares pursuant to deferred stock unit awards
|
30,559
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Forfeitures of restricted shares
|
(1,084
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Shares repurchased and retired
|
(1,711,992
|
)
|
|
(16
|
)
|
|
(37,833
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37,849
|
)
|
||||||
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
11,162
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,162
|
|
||||||
Investments from non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
158
|
|
|
158
|
|
||||||
Distributions to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(71
|
)
|
|
(71
|
)
|
||||||
Currency translation adjustment and derivative transactions, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,664
|
|
|
221
|
|
|
20,885
|
|
||||||
BALANCE, December 31, 2017
|
32,462,542
|
|
|
$
|
325
|
|
|
$
|
140,749
|
|
|
$
|
386,008
|
|
|
$
|
(32,836
|
)
|
|
$
|
10,810
|
|
|
$
|
505,056
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(66,235
|
)
|
|
$
|
29,160
|
|
|
$
|
(7,990
|
)
|
|
|
|
|
|
|
||||||
Adjustments to reconcile to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
44,419
|
|
|
46,719
|
|
|
43,791
|
|
|||
Gain on sale of fixed assets
|
(59
|
)
|
|
(1,916
|
)
|
|
(929
|
)
|
|||
Equity-based compensation expense
|
11,162
|
|
|
9,261
|
|
|
7,987
|
|
|||
Deferred income taxes
|
(9,376
|
)
|
|
1,772
|
|
|
924
|
|
|||
Non-cash restructuring charges
|
10,080
|
|
|
300
|
|
|
1,816
|
|
|||
Non-cash portion of litigation settlement
|
—
|
|
|
(3,000
|
)
|
|
—
|
|
|||
Definite-lived intangible asset impairment
|
41,032
|
|
|
—
|
|
|
—
|
|
|||
Goodwill impairment
|
45,390
|
|
|
—
|
|
|
43,484
|
|
|||
Debt issuance costs
|
—
|
|
|
—
|
|
|
3,377
|
|
|||
Loss on sale of businesses
|
—
|
|
|
—
|
|
|
3,414
|
|
|||
Loss on foreign currency transactions
|
2,152
|
|
|
911
|
|
|
80
|
|
|||
Other
|
(1,562
|
)
|
|
(1,044
|
)
|
|
(168
|
)
|
|||
Changes in operating assets and liabilities (net of acquisitions):
|
|
|
|
|
|
||||||
Restricted cash related to operating activities
|
1,258
|
|
|
2,055
|
|
|
(382
|
)
|
|||
Receivables net, retainage and costs and estimated earnings in excess of billings
|
(29,847
|
)
|
|
52,774
|
|
|
12,283
|
|
|||
Inventories
|
(1,926
|
)
|
|
(2,569
|
)
|
|
6,984
|
|
|||
Prepaid expenses and other assets
|
8,732
|
|
|
16,759
|
|
|
(28,895
|
)
|
|||
Accounts payable and accrued expenses
|
18,803
|
|
|
(49,259
|
)
|
|
(582
|
)
|
|||
Billings in excess of costs and estimated earnings
|
(5,924
|
)
|
|
(27,761
|
)
|
|
45,700
|
|
|||
Other operating
|
(1,798
|
)
|
|
(946
|
)
|
|
1,129
|
|
|||
Net cash provided by operating activities
|
66,301
|
|
|
73,216
|
|
|
132,023
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(30,830
|
)
|
|
(38,760
|
)
|
|
(29,454
|
)
|
|||
Proceeds from sale of fixed assets
|
707
|
|
|
3,310
|
|
|
3,173
|
|
|||
Patent expenditures
|
(379
|
)
|
|
(1,043
|
)
|
|
(1,503
|
)
|
|||
Restricted cash related to investing activities
|
2,000
|
|
|
(1,086
|
)
|
|
(3,538
|
)
|
|||
Purchase of Underground Solutions, Inc., net of cash acquired
|
—
|
|
|
(84,740
|
)
|
|
—
|
|
|||
Other acquisition activity, net of cash acquired
|
(9,045
|
)
|
|
(11,567
|
)
|
|
(6,662
|
)
|
|||
Sale of interest in Bayou Perma-Pipe Canada, Ltd., net of cash disposed
|
—
|
|
|
6,599
|
|
|
—
|
|
|||
Payment to Fyfe Asia sellers for final net working capital
|
—
|
|
|
—
|
|
|
(1,098
|
)
|
|||
Net cash used in investing activities
|
(37,547
|
)
|
|
(127,287
|
)
|
|
(39,082
|
)
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||
|
Revenues
|
|
Net Loss
|
|
Revenues
|
|
Net Income (Loss)
|
|
Revenues
|
|
Net Loss
|
||||||||||||
Schultz
(1)
|
$
|
71,252
|
|
|
$
|
(891
|
)
|
|
$
|
24,702
|
|
|
$
|
(1,068
|
)
|
|
$
|
13,771
|
|
|
$
|
(1,470
|
)
|
Underground Solutions
(2)
|
32,063
|
|
|
(3,778
|
)
|
|
29,425
|
|
|
(2,694
|
)
|
|
N/A
|
|
|
N/A
|
|
||||||
Fyfe Europe
|
583
|
|
|
(190
|
)
|
|
23
|
|
|
(764
|
)
|
|
N/A
|
|
|
N/A
|
|
||||||
LMJ
(3)
|
3,070
|
|
|
(2,186
|
)
|
|
4,865
|
|
|
(1,153
|
)
|
|
N/A
|
|
|
N/A
|
|
||||||
Concrete Solutions
(4)
|
5,922
|
|
|
(1,940
|
)
|
|
2,700
|
|
|
106
|
|
|
N/A
|
|
|
N/A
|
|
||||||
Environmental Techniques
|
5,270
|
|
|
(909
|
)
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
(1)
|
The reported net loss in 2017 includes a pre-tax allocation of corporate expenses of
$6.8 million
. The reported net loss in 2016 includes pre-tax 2016 Restructuring charges of
$0.2 million
and a pre-tax allocation of corporate expenses of
$2.9 million
. The reported net loss in 2015 includes a pre-tax impairment charge of
$1.7 million
allocated from goodwill impairments in the Energy Services reporting unit (see Note 2) and a pre-tax allocation of corporate expenses of
$1.0 million
.
|
(2)
|
The reported net loss in 2017 includes a pre-tax allocation of corporate expenses of
$4.5 million
.
The reported net loss in 2016 includes a pre-tax charge for inventory step-up of
$3.6 million
, recognized as part of the accounting for business combinations, and a pre-tax allocation of corporate expenses of
$3.2 million
.
|
(3)
|
The reported net loss in 2017 includes pre-tax 2017 Restructuring charges of
$0.1 million
.
|
(4)
|
The reported net loss in 2017 includes a pre-tax impairment charge of
$2.2 million
allocated from goodwill impairments in the Fyfe reporting unit (see Note 2).
|
|
Years Ended December 31,
|
||||||||||
|
2017
(1)
|
|
2016
(2)
|
|
2015
(3)
|
||||||
Revenues
|
$
|
1,359,901
|
|
|
$
|
1,238,730
|
|
|
$
|
1,387,465
|
|
Net income (loss)
(4)
|
(69,227
|
)
|
|
29,959
|
|
|
(6,545
|
)
|
|||
Diluted earnings (loss) per share
|
$
|
(2.09
|
)
|
|
$
|
0.85
|
|
|
$
|
(0.18
|
)
|
(1)
|
Includes pro-forma results related to Environmental Techniques.
|
(2)
|
Includes pro-forma results related to Environmental Techniques, Underground Solutions, Fyfe Europe, LMJ and Concrete Solutions.
|
(3)
|
Includes pro-forma results related to Underground Solutions, Fyfe Europe, LMJ, Concrete Solutions and Schultz.
|
(4)
|
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.
|
|
Environmental
Techniques
|
|
Underground
Solutions
|
|
Fyfe
Europe
|
|
LMJ
|
|
Concrete
Solutions
|
|
Schultz
|
||||||||||||
Cash
|
$
|
—
|
|
|
$
|
3,630
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Receivables and cost and estimated earnings in excess of billings
|
801
|
|
|
6,339
|
|
|
—
|
|
|
—
|
|
|
1,469
|
|
|
1,086
|
|
||||||
Inventories
|
1,281
|
|
|
12,629
|
|
|
—
|
|
|
504
|
|
|
857
|
|
|
—
|
|
||||||
Prepaid expenses and other current assets
|
93
|
|
|
671
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
19
|
|
||||||
Property, plant and equipment
|
2,147
|
|
|
2,755
|
|
|
50
|
|
|
1,194
|
|
|
422
|
|
|
162
|
|
||||||
Identified intangible assets
|
1,869
|
|
|
33,370
|
|
|
513
|
|
|
795
|
|
|
1,722
|
|
|
3,060
|
|
||||||
Deferred income tax assets
|
124
|
|
|
13,282
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other assets
|
—
|
|
|
90
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Accounts payable
|
(1,025
|
)
|
|
(4,653
|
)
|
|
—
|
|
|
—
|
|
|
(837
|
)
|
|
(663
|
)
|
||||||
Accrued expenses
|
(186
|
)
|
|
(5,900
|
)
|
|
—
|
|
|
—
|
|
|
(149
|
)
|
|
—
|
|
||||||
Billings in excess of cost and estimated earnings
|
—
|
|
|
(2,943
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Deferred tax liabilities
|
(413
|
)
|
|
(14,562
|
)
|
|
—
|
|
|
—
|
|
|
(482
|
)
|
|
—
|
|
||||||
Total identifiable net assets
|
$
|
4,691
|
|
|
$
|
44,708
|
|
|
$
|
563
|
|
|
$
|
2,493
|
|
|
$
|
3,020
|
|
|
$
|
3,664
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total consideration recorded
|
$
|
8,046
|
|
|
$
|
88,370
|
|
|
$
|
3,000
|
|
|
$
|
3,235
|
|
|
$
|
6,393
|
|
|
$
|
7,662
|
|
Less: total identifiable net assets
|
4,691
|
|
|
44,708
|
|
|
563
|
|
|
2,493
|
|
|
3,020
|
|
|
3,664
|
|
||||||
Final purchase price goodwill
|
$
|
3,355
|
|
|
$
|
43,662
|
|
|
$
|
2,437
|
|
|
$
|
742
|
|
|
$
|
3,373
|
|
|
$
|
3,998
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Currency translation adjustments
(1)
|
$
|
(35,928
|
)
|
|
$
|
(54,145
|
)
|
Derivative hedging activity
|
3,336
|
|
|
1,004
|
|
||
Pension activity
|
(244
|
)
|
|
(359
|
)
|
||
Total accumulated other comprehensive loss
|
$
|
(32,836
|
)
|
|
$
|
(53,500
|
)
|
(1)
|
Due to the weakening of the U.S. dollar, there was a substantial increase during 2017 with respect to certain functional currencies and their relation to the U.S. dollar, most notably the Canadian dollar, Australian dollar, British pound and euro.
|
|
Years Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Weighted average number of common shares used for basic EPS
|
33,150,949
|
|
|
34,713,937
|
|
|
36,554,437
|
|
Effect of dilutive stock options and restricted and deferred stock unit awards
|
—
|
|
|
496,493
|
|
|
—
|
|
Weighted average number of common shares and dilutive potential common stock used in dilutive EPS
|
33,150,949
|
|
|
35,210,430
|
|
|
36,554,437
|
|
•
|
significant underperformance of a segment 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 segment’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.
|
|
December 31,
|
||||||
Balance sheet data
|
2017
(1)
|
|
2016
|
||||
Current assets
|
$
|
42,732
|
|
|
$
|
51,354
|
|
Non-current assets
|
26,346
|
|
|
25,607
|
|
||
Current liabilities
|
12,449
|
|
|
29,324
|
|
||
Non-current liabilities
|
30,675
|
|
|
28,849
|
|
(1)
|
Amounts include
$25.4 million
of assets and
$9.8 million
of liabilities classified as held for sale relating to our pipe coating and insulation joint venture in Louisiana, Bayou Wasco Insulation, LLC. See Note 5.
|
|
Years Ended December 31,
|
||||||||||
Statement of operations data
|
2017
(1)
|
|
2016
|
|
2015
|
||||||
Revenue
|
$
|
91,947
|
|
|
$
|
61,205
|
|
|
$
|
77,361
|
|
Gross profit
|
15,194
|
|
|
5,760
|
|
|
11,325
|
|
|||
Net income (loss)
|
3,432
|
|
|
(3,075
|
)
|
|
321
|
|
(1)
|
During 2017, increases were primarily driven from: (i) our joint venture in Louisiana, which completed its work on a large deepwater pipe coating and insulation project; and (ii) the formation of our new joint venture in South Africa.
|
|
Infrastructure
Solutions
|
|
Corrosion
Protection
|
|
Total
|
||||||
Severance and benefit related costs
|
$
|
4,587
|
|
|
$
|
2,758
|
|
|
$
|
7,345
|
|
Lease and contract termination costs
|
4,545
|
|
|
775
|
|
|
5,320
|
|
|||
Relocation and other moving costs
|
26
|
|
|
121
|
|
|
147
|
|
|||
Other restructuring costs
(1)
|
8,668
|
|
|
2,263
|
|
|
10,931
|
|
|||
Total pre-tax restructuring charges
(2)
|
$
|
17,826
|
|
|
$
|
5,917
|
|
|
$
|
23,743
|
|
(1)
|
Includes charges primarily related to exiting non-pipe-related applications for the Tyfo
®
system in North America and right-sizing the cathodic protection services operation in Canada, inclusive of wind-down costs, professional fees, patent write offs, fixed asset disposals and certain other restructuring and related charges.
|
(2)
|
Includes
$1.3 million
of corporate-related restructuring charges that have been allocated to the Infrastructure Solutions and Corrosion Protection reportable segments.
|
|
Infrastructure
Solutions
|
|
Corrosion
Protection
|
|
Total
(1)
|
||||||
Cost of revenues
|
$
|
30
|
|
|
$
|
15
|
|
|
$
|
45
|
|
Operating expenses
|
8,636
|
|
|
2,248
|
|
|
10,884
|
|
|||
Restructuring and related charges
|
9,160
|
|
|
3,654
|
|
|
12,814
|
|
|||
Total pre-tax restructuring charges
|
$
|
17,826
|
|
|
$
|
5,917
|
|
|
$
|
23,743
|
|
(1)
|
Total pre-tax restructuring charges include cash charges of
$13.6 million
and non-cash charges of
$10.1 million
. Cash charges consist of charges incurred during the year that will be settled in cash, either during the current period or future periods.
|
|
2017
Charge to Income |
|
Utilized in 2017
|
|
Reserves at
December 31, 2017 |
||||||||||
|
|
Cash
(1)
|
|
Non-Cash
|
|
||||||||||
Severance and benefit related costs
|
$
|
7,345
|
|
|
$
|
3,481
|
|
|
$
|
—
|
|
|
$
|
3,864
|
|
Lease and contract termination costs
|
5,320
|
|
|
2,706
|
|
|
1,964
|
|
|
650
|
|
||||
Relocation and other moving costs
|
147
|
|
|
147
|
|
|
—
|
|
|
—
|
|
||||
Other restructuring costs
|
10,931
|
|
|
2,140
|
|
|
8,116
|
|
|
675
|
|
||||
Total pre-tax restructuring charges
|
$
|
23,743
|
|
|
$
|
8,474
|
|
|
$
|
10,080
|
|
|
$
|
5,189
|
|
(1)
|
Refers to cash utilized to settle charges during 2017.
|
|
Year Ended December 31, 2016
|
||||||||||||||
|
Infrastructure
Solutions
|
|
Corrosion
Protection
|
|
Energy
Services
|
|
Total
|
||||||||
Severance and benefit related costs
|
$
|
2,249
|
|
|
$
|
3,588
|
|
|
$
|
1,559
|
|
|
$
|
7,396
|
|
Lease termination costs
|
—
|
|
|
154
|
|
|
983
|
|
|
1,137
|
|
||||
Relocation and other moving costs
|
307
|
|
|
62
|
|
|
193
|
|
|
562
|
|
||||
Other restructuring costs
(1)
|
808
|
|
|
761
|
|
|
5,436
|
|
|
7,005
|
|
||||
Total pre-tax restructuring charges
(2)
|
$
|
3,364
|
|
|
$
|
4,565
|
|
|
$
|
8,171
|
|
|
$
|
16,100
|
|
(1)
|
For Energy Services, includes charges primarily related to downsizing the Company’s upstream operations in California, inclusive of wind-down costs, professional fees, fixed asset disposals and certain other restructuring charges.
|
(2)
|
Includes
$1.4 million
of corporate-related restructuring charges that have been allocated to the Infrastructure Solutions, Corrosion Protection and Energy Services reportable segments.
|
|
Year Ended December 31, 2016
|
||||||||||||||
|
Infrastructure
Solutions |
|
Corrosion
Protection |
|
Energy
Services |
|
Total
(1)
|
||||||||
Cost of revenues
|
$
|
—
|
|
|
$
|
278
|
|
|
$
|
—
|
|
|
$
|
278
|
|
Operating expenses
|
559
|
|
|
483
|
|
|
5,436
|
|
|
6,478
|
|
||||
Restructuring and related charges
|
2,557
|
|
|
3,803
|
|
|
2,735
|
|
|
9,095
|
|
||||
Other expense
|
249
|
|
|
—
|
|
|
—
|
|
|
249
|
|
||||
Total pre-tax charges
|
$
|
3,365
|
|
|
$
|
4,564
|
|
|
$
|
8,171
|
|
|
$
|
16,100
|
|
(1)
|
Total pre-tax restructuring charges include cash charges of
$15.3 million
and non-cash charges of
$0.8 million
for in 2016. Cash charges consist of charges incurred during the period that will be settled in cash, either during the current period or future periods.
|
|
Reserves at
December 31,
2016
|
|
2017
Charge to Income |
|
Utilized in 2017
|
|
Reserves at
December 31, 2017 |
||||||||||||
|
|
|
Cash
(1)
|
|
Non-Cash
|
|
|||||||||||||
Severance and benefit related costs
|
$
|
645
|
|
|
$
|
—
|
|
|
$
|
645
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Lease termination costs
|
125
|
|
|
—
|
|
|
125
|
|
|
—
|
|
|
—
|
|
|||||
Relocation and other moving costs
|
10
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|||||
Other restructuring costs
|
120
|
|
|
—
|
|
|
120
|
|
|
—
|
|
|
—
|
|
|||||
Total pre-tax restructuring charges
|
$
|
900
|
|
|
$
|
—
|
|
|
$
|
900
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Refers to cash utilized to settle charges during 2017.
|
|
2016
Charge to Income |
|
Utilized in 2016
|
|
Reserves at
December 31, 2016 |
||||||||||
|
|
Cash
(1)
|
|
Non-Cash
|
|
||||||||||
Severance and benefit related costs
|
$
|
7,396
|
|
|
$
|
6,751
|
|
|
$
|
—
|
|
|
$
|
645
|
|
Lease termination costs
|
1,137
|
|
|
1,012
|
|
|
—
|
|
|
125
|
|
||||
Relocation and other moving costs
|
562
|
|
|
552
|
|
|
—
|
|
|
10
|
|
||||
Other restructuring costs
|
7,005
|
|
|
6,120
|
|
|
765
|
|
|
120
|
|
||||
Total pre-tax restructuring charges
|
$
|
16,100
|
|
|
$
|
14,435
|
|
|
$
|
765
|
|
|
$
|
900
|
|
(1)
|
Refers to cash utilized to settle charges during 2016.
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Balance, January 1, 2017
|
$
|
6,098
|
|
|
$
|
14,524
|
|
|
$
|
19,307
|
|
Bad debt expense
(1)(2)
|
3,155
|
|
|
1,083
|
|
|
6,369
|
|
|||
Write-offs and adjustments
(1)(2)
|
(3,478
|
)
|
|
(9,509
|
)
|
|
(11,152
|
)
|
|||
Balance, December 31, 2017
(3)
|
$
|
5,775
|
|
|
$
|
6,098
|
|
|
$
|
14,524
|
|
(1)
|
The Company recorded bad debt expense (reversals) of
$0.4 million
,
$(0.6) million
and
$1.2 million
in 2017, 2016 and 2015, respectively, as part of the restructuring efforts (see Note 3) and was primarily due to the exiting of certain low-return businesses mainly in foreign locations.
|
(2)
|
The Company recorded bad debt expense of
$2.9 million
in 2015 related to long-dated receivables within Corrosion Protection.
|
(3)
|
December 31, 2015 balance includes
$7.5 million
related to long-dated receivables, some of which were in litigation or dispute, within Infrastructure Solutions.
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Costs incurred on uncompleted contracts
|
$
|
751,399
|
|
|
$
|
741,590
|
|
Estimated earnings to date
|
138,998
|
|
|
165,862
|
|
||
Subtotal
|
890,397
|
|
|
907,452
|
|
||
Less – billings to date
|
(866,623
|
)
|
|
(907,749
|
)
|
||
Total
|
$
|
23,774
|
|
|
$
|
(297
|
)
|
Included in the accompanying balance sheets:
|
|
|
|
|
|
||
Costs and estimated earnings in excess of billings
|
$
|
75,371
|
|
|
$
|
62,401
|
|
Billings in excess of costs and estimated earnings
|
(51,597
|
)
|
|
(62,698
|
)
|
||
Total
|
$
|
23,774
|
|
|
$
|
(297
|
)
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Raw materials and supplies
|
$
|
30,265
|
|
|
$
|
31,399
|
|
Work-in-process
|
3,246
|
|
|
2,207
|
|
||
Finished products
|
13,596
|
|
|
14,015
|
|
||
Construction materials
|
16,862
|
|
|
16,332
|
|
||
Total
|
$
|
63,969
|
|
|
$
|
63,953
|
|
|
Estimated
Useful Lives (Years) |
|
December 31,
|
||||||||
|
|
2017
|
|
2016
|
|||||||
Land and land improvements
|
|
|
$
|
10,258
|
|
|
$
|
10,414
|
|
||
Buildings and improvements
|
5
|
—
|
40
|
|
47,725
|
|
|
65,505
|
|
||
Machinery and equipment
|
4
|
—
|
10
|
|
159,626
|
|
|
189,849
|
|
||
Furniture and fixtures
|
3
|
—
|
10
|
|
35,149
|
|
|
32,386
|
|
||
Autos and trucks
|
3
|
—
|
10
|
|
54,039
|
|
|
50,128
|
|
||
Construction in progress
|
|
|
|
|
8,424
|
|
|
9,944
|
|
||
Subtotal
|
|
|
|
|
315,221
|
|
|
358,226
|
|
||
Less – Accumulated depreciation
|
|
|
|
|
(206,181
|
)
|
|
(201,479
|
)
|
||
Total
|
|
|
|
|
$
|
109,040
|
|
|
$
|
156,747
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Vendor and other accrued expenses
|
$
|
35,193
|
|
|
$
|
33,108
|
|
Estimated casualty and healthcare liabilities
|
14,772
|
|
|
14,610
|
|
||
Job costs
|
9,585
|
|
|
8,707
|
|
||
Accrued compensation
|
27,901
|
|
|
23,398
|
|
||
Income taxes payable
|
4,560
|
|
|
1,870
|
|
||
Deferred income taxes
(1)
|
—
|
|
|
3,317
|
|
||
Total
|
$
|
92,011
|
|
|
$
|
85,010
|
|
(1)
|
As of January 1, 2017, the Company adopted FASB Accounting Standards Update No. 2015-17,
Balance Sheet Classification of Deferred Taxes,
which requires all deferred tax assets and liabilities, along
with any related valuation allowance, to be presented as non-current.
Prior period balances were not retrospectively adjusted.
|
Assets held for sale:
|
December 31, 2017
|
||
Current assets
|
|
||
Cash and cash equivalents
|
$
|
989
|
|
Receivables
|
6,368
|
|
|
Costs and estimated earnings in excess of billings
|
1,299
|
|
|
Inventories
|
3,727
|
|
|
Prepaid expenses and other current assets
|
827
|
|
|
Total current assets
|
13,210
|
|
|
Property, plant & equipment, less accumulated depreciation
|
53,887
|
|
|
Identified intangible assets, less accumulated amortization
|
3,217
|
|
|
Total assets held for sale
|
$
|
70,314
|
|
|
|
||
Liabilities held for sale:
|
|
||
Current liabilities
|
|
||
Accounts payable
|
$
|
5,763
|
|
Accrued expenses
|
1,805
|
|
|
Billings in excess of costs and estimated earnings
|
5,478
|
|
|
Total current liabilities
|
13,046
|
|
|
Debt
|
7,757
|
|
|
Other liabilities
|
97
|
|
|
Total liabilities held for sale
|
$
|
20,900
|
|
|
Infrastructure
Solutions
|
|
Corrosion
Protection
|
|
Energy
Services
|
|
Total
|
||||||||
Balance, December 31, 2015
|
|
|
|
|
|
|
|
||||||||
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
|
|
||||
2016 Activity:
|
|
|
|
|
|
|
|
||||||||
Acquisitions
(1)
|
50,585
|
|
|
—
|
|
|
—
|
|
|
50,585
|
|
||||
Foreign currency translation
|
(1,616
|
)
|
|
530
|
|
|
—
|
|
|
(1,086
|
)
|
||||
Balance, December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Goodwill, gross
|
239,494
|
|
|
73,875
|
|
|
80,246
|
|
|
393,615
|
|
||||
Accumulated impairment losses
|
(16,069
|
)
|
|
(45,400
|
)
|
|
(33,527
|
)
|
|
(94,996
|
)
|
||||
Goodwill, net
|
223,425
|
|
|
28,475
|
|
|
46,719
|
|
|
298,619
|
|
||||
2017 Activity:
|
|
|
|
|
|
|
|
||||||||
Acquisitions
(2)
|
3,355
|
|
|
—
|
|
|
—
|
|
|
3,355
|
|
||||
Impairments
(3)
|
(45,390
|
)
|
|
—
|
|
|
—
|
|
|
(45,390
|
)
|
||||
Foreign currency translation
|
3,637
|
|
|
494
|
|
|
—
|
|
|
4,131
|
|
||||
Balance, December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Goodwill, gross
|
246,486
|
|
|
74,369
|
|
|
80,246
|
|
|
401,101
|
|
||||
Accumulated impairment losses
|
(61,459
|
)
|
|
(45,400
|
)
|
|
(33,527
|
)
|
|
(140,386
|
)
|
||||
Goodwill, net
|
$
|
185,027
|
|
|
$
|
28,969
|
|
|
$
|
46,719
|
|
|
$
|
260,715
|
|
(1)
|
During 2016 , the Company recorded goodwill of
$44.0 million
,
$2.4 million
,
$0.8 million
and
$3.4 million
related to the acquisitions of Underground Solutions, Fyfe Europe, LMJ and Concrete Solutions, respectively (see Note 1)
|
(2)
|
During 2017, the Company recorded goodwill of
$3.4 million
related to the acquisition of Environmental Techniques (see Note 1).
|
(3)
|
During 2017, the Company recorded a
$45.4 million
goodwill impairment to its Fyfe reporting unit, which is included in the Infrastructure Solutions reportable segment (see Note 2).
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||
|
Weighted Average Useful Lives (Years)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
License agreements
|
10.5
|
|
$
|
4,497
|
|
|
$
|
(3,623
|
)
|
|
$
|
874
|
|
|
$
|
4,418
|
|
|
$
|
(3,438
|
)
|
|
$
|
980
|
|
Leases
|
3.0
|
|
796
|
|
|
(534
|
)
|
|
262
|
|
|
2,065
|
|
|
(912
|
)
|
|
1,153
|
|
||||||
Trademarks
(1)(2)
|
10.5
|
|
15,464
|
|
|
(6,184
|
)
|
|
9,280
|
|
|
24,185
|
|
|
(7,868
|
)
|
|
16,317
|
|
||||||
Non-competes
|
1.7
|
|
1,197
|
|
|
(1,048
|
)
|
|
149
|
|
|
1,308
|
|
|
(1,054
|
)
|
|
254
|
|
||||||
Customer relationships
(1)(2)
|
9.9
|
|
160,423
|
|
|
(56,907
|
)
|
|
103,516
|
|
|
187,554
|
|
|
(53,830
|
)
|
|
133,724
|
|
||||||
Patents and acquired technology
(2)(3)
|
6.1
|
|
39,285
|
|
|
(21,021
|
)
|
|
18,264
|
|
|
66,222
|
|
|
(23,739
|
)
|
|
42,483
|
|
||||||
|
|
|
$
|
221,662
|
|
|
$
|
(89,317
|
)
|
|
$
|
132,345
|
|
|
$
|
285,752
|
|
|
$
|
(90,841
|
)
|
|
$
|
194,911
|
|
(1)
|
During 2017, the Company recorded trademarks of
$0.1 million
and customer relationships of
$1.7 million
related to the acquisition of Environmental Techniques (see Note 1).
|
(2)
|
During 2017, the Company recorded intangible asset impairments related to restructuring and realignment efforts at Fyfe North America of
$3.4 million
for trademarks,
$20.8 million
for customer relationships and
$16.8 million
for patents and acquired technology (see Note 2).
|
(3)
|
During 2017, the Company wrote off
$5.3 million
related to certain patents abandoned as part of the 2017 Restructuring (see Note 3).
|
Year
|
|
Amount
|
||
2018
|
|
$
|
13,733
|
|
2019
|
|
13,569
|
|
|
2020
|
|
13,496
|
|
|
2021
|
|
13,328
|
|
|
2022
|
|
13,328
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Term note, due October 30, 2020, annualized rates of 3.60% and 3.08%, respectively
|
$
|
308,437
|
|
|
$
|
328,125
|
|
Line of credit, 3.50% and 2.96%, respectively
|
38,000
|
|
|
36,000
|
|
||
Other notes with interest rates from 3.3% to 7.8%
|
875
|
|
|
9,901
|
|
||
Subtotal
|
347,312
|
|
|
374,026
|
|
||
Less – Current maturities and notes payable
|
26,555
|
|
|
19,835
|
|
||
Less – Unamortized loan costs
|
2,517
|
|
|
3,406
|
|
||
Total
|
$
|
318,240
|
|
|
$
|
350,785
|
|
Year
|
|
Amount
(1)
|
||
2018
|
|
$
|
26,555
|
|
2019
|
|
28,437
|
|
|
2020
|
|
292,320
|
|
|
2021
|
|
—
|
|
|
2022
|
|
—
|
|
|
Thereafter
|
|
—
|
|
|
Total
|
|
$
|
347,312
|
|
(1)
|
See Note 15 to the consolidated financial statements contained in this Report regarding the amended Credit Facility.
|
•
|
Consolidated financial leverage ratio, as amended, compares consolidated funded indebtedness to amended Credit Facility defined income with a maximum amount not to exceed
3.75
to 1.00. At
December 31, 2017
, the Company’s consolidated financial leverage ratio was
2.97
to 1.00 and, using the amended Credit Facility defined income, the Company had the capacity to borrow up to
$95.3 million
of additional debt.
|
•
|
Consolidated fixed charge coverage ratio, as amended, compares amended Credit Facility defined income to amended Credit Facility defined fixed charges with a minimum permitted ratio of not less than
1.15
to 1.00. At
December 31, 2017
, the Company’s fixed charge ratio was
1.72
to 1.00.
|
|
Years Ended December 31,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Deferred
Stock
Units
|
|
Weighted
Average
Award
Date
Fair Value
|
|
Deferred
Stock
Units
|
|
Weighted
Average
Award
Date
Fair Value
|
|
Deferred
Stock
Units
|
|
Weighted
Average
Award
Date
Fair Value
|
|||||||||
Outstanding, beginning of year
|
253,445
|
|
|
$
|
19.93
|
|
|
247,219
|
|
|
$
|
19.92
|
|
|
221,471
|
|
|
$
|
20.10
|
|
Awarded
|
47,091
|
|
|
23.53
|
|
|
45,886
|
|
|
21.22
|
|
|
53,527
|
|
|
18.56
|
|
|||
Shares distributed
|
(30,559
|
)
|
|
23.57
|
|
|
(39,660
|
)
|
|
21.29
|
|
|
(27,779
|
)
|
|
18.76
|
|
|||
Outstanding, end of year
|
269,977
|
|
|
$
|
20.14
|
|
|
253,445
|
|
|
$
|
19.93
|
|
|
247,219
|
|
|
$
|
19.92
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Amount collected from stock option exercises
|
$
|
822
|
|
|
$
|
306
|
|
|
$
|
2,748
|
|
Total intrinsic value of stock option exercises
|
370
|
|
|
47
|
|
|
1,108
|
|
|||
Tax benefit of stock option exercises recorded in income tax expense
(1)
|
63
|
|
|
—
|
|
|
—
|
|
|||
Tax benefit of stock option exercises recorded in additional paid-in-capital
(1)
|
—
|
|
|
315
|
|
|
209
|
|
|||
Aggregate intrinsic value of outstanding stock options
|
386
|
|
|
102
|
|
|
173
|
|
|||
Aggregate intrinsic value of exercisable stock options
|
386
|
|
|
102
|
|
|
169
|
|
(1)
|
As of January 1, 2017, the Company adopted FASB Accounting Standards Update No. 2016-09,
Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting
, which, among other items, changed the accounting for the tax benefit of stock option exercises so that it is now recorded as part of current earnings rather than additional paid-in capital. Prior period balances were not retrospectively adjusted.
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
3,764
|
|
|
$
|
(636
|
)
|
|
$
|
2,150
|
|
Foreign
|
7,512
|
|
|
3,585
|
|
|
5,600
|
|
|||
State
|
3,351
|
|
|
175
|
|
|
528
|
|
|||
Subtotal
|
14,627
|
|
|
3,124
|
|
|
8,278
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(8,706
|
)
|
|
2,158
|
|
|
218
|
|
|||
Foreign
|
(1,099
|
)
|
|
475
|
|
|
1,382
|
|
|||
State
|
183
|
|
|
352
|
|
|
(673
|
)
|
|||
Subtotal
|
(9,622
|
)
|
|
2,985
|
|
|
927
|
|
|||
Total tax provision
|
$
|
5,005
|
|
|
$
|
6,109
|
|
|
$
|
9,205
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Income taxes (benefit) at U.S. federal statutory tax rate
|
$
|
(21,431
|
)
|
|
$
|
12,344
|
|
|
$
|
425
|
|
Increase (decrease) in taxes resulting from:
|
|
|
|
|
|
||||||
Change in the balance of the valuation allowance for deferred tax assets allocated to foreign income tax expense
|
4,598
|
|
|
1,364
|
|
|
(756
|
)
|
|||
Change in the balance of the valuation allowance for deferred tax assets allocated to domestic income tax expense
|
12,755
|
|
|
(4,202
|
)
|
|
4,834
|
|
|||
State income taxes, net of federal income tax benefit
|
2,270
|
|
|
342
|
|
|
(94
|
)
|
|||
Divestitures
|
—
|
|
|
271
|
|
|
2,269
|
|
|||
Meals and entertainment
|
785
|
|
|
736
|
|
|
761
|
|
|||
Changes in taxes previously accrued
|
(1,339
|
)
|
|
23
|
|
|
(489
|
)
|
|||
Foreign tax rate differences
|
913
|
|
|
(2,559
|
)
|
|
(1,468
|
)
|
|||
Goodwill impairment
|
6,359
|
|
|
—
|
|
|
3,485
|
|
|||
Recognition of uncertain tax positions
|
(62
|
)
|
|
85
|
|
|
24
|
|
|||
Deemed mandatory repatriation
|
10,406
|
|
|
—
|
|
|
—
|
|
|||
Release of deferred tax liability on foreign earnings
|
(7,051
|
)
|
|
—
|
|
|
—
|
|
|||
Settlement of escrow arrangement
|
—
|
|
|
—
|
|
|
(1,115
|
)
|
|||
Domestic Production Activities deduction
|
(1,921
|
)
|
|
(1,017
|
)
|
|
(528
|
)
|
|||
Incremental U.S. taxes on undistributed foreign earnings
|
—
|
|
|
—
|
|
|
2,102
|
|
|||
Other matters
|
(1,277
|
)
|
|
(1,278
|
)
|
|
(245
|
)
|
|||
Total tax provision
|
$
|
5,005
|
|
|
$
|
6,109
|
|
|
$
|
9,205
|
|
Effective tax rate
|
(8.2
|
)%
|
|
17.3
|
%
|
|
757.6
|
%
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred income tax assets:
|
|
|
|
||||
Foreign tax credit carryforwards
|
$
|
466
|
|
|
$
|
3,426
|
|
Net operating loss carryforwards
|
23,216
|
|
|
26,212
|
|
||
Accrued expenses
|
12,107
|
|
|
17,366
|
|
||
Other
|
4,707
|
|
|
8,701
|
|
||
Total gross deferred income tax assets
|
40,496
|
|
|
55,705
|
|
||
Less valuation allowance
|
(29,782
|
)
|
|
(15,428
|
)
|
||
Net deferred income tax assets
|
10,714
|
|
|
40,277
|
|
||
Deferred income tax liabilities:
|
|
|
|
||||
Property, plant and equipment
|
(9,482
|
)
|
|
(12,627
|
)
|
||
Intangible assets
|
(2,201
|
)
|
|
(28,346
|
)
|
||
Undistributed foreign earnings
|
—
|
|
|
(7,051
|
)
|
||
Other
|
(6,576
|
)
|
|
(9,237
|
)
|
||
Total deferred income tax liabilities
|
(18,259
|
)
|
|
(57,261
|
)
|
||
Net deferred income tax liabilities
|
$
|
(7,545
|
)
|
|
$
|
(16,984
|
)
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Current deferred income tax assets, net
(1)
|
$
|
—
|
|
|
$
|
7,824
|
|
Current deferred income tax liabilities, net
(1)
|
—
|
|
|
(3,317
|
)
|
||
Noncurrent deferred income tax assets, net
|
1,666
|
|
|
1,848
|
|
||
Noncurrent deferred income tax liabilities, net
|
(9,211
|
)
|
|
(23,339
|
)
|
||
Net deferred income tax liabilities
|
$
|
(7,545
|
)
|
|
$
|
(16,984
|
)
|
(1)
|
As of January 1, 2017, the Company adopted FASB Accounting Standards Update No. 2015-17,
Balance Sheet Classification of Deferred Taxes,
which requires all deferred tax assets and liabilities, along
with any related valuation allowance, to be presented as non-current.
Prior period balances were not retrospectively adjusted.
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Balance, at beginning of year
|
$
|
15,428
|
|
|
$
|
18,897
|
|
|
$
|
19,353
|
|
Additions
|
19,260
|
|
|
3,095
|
|
|
7,783
|
|
|||
Reversals
|
(183
|
)
|
|
(4,984
|
)
|
|
(5,294
|
)
|
|||
Remeasurement of U.S. deferred tax balances
|
(5,141
|
)
|
|
—
|
|
|
—
|
|
|||
Other adjustments
|
418
|
|
|
(1,580
|
)
|
|
(2,945
|
)
|
|||
Balance, at end of year
|
$
|
29,782
|
|
|
$
|
15,428
|
|
|
$
|
18,897
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Balance, at beginning of year
|
$
|
2,465
|
|
|
$
|
2,410
|
|
|
$
|
2,672
|
|
Additions for tax positions of prior years related to acquisitions
|
—
|
|
|
148
|
|
|
—
|
|
|||
Additions for tax positions of prior years
|
12
|
|
|
10
|
|
|
10
|
|
|||
Lapse in statute of limitations
|
(274
|
)
|
|
(83
|
)
|
|
(218
|
)
|
|||
Foreign currency translation
|
26
|
|
|
(20
|
)
|
|
(54
|
)
|
|||
Balance, at end of year, total tax provision
|
$
|
2,229
|
|
|
$
|
2,465
|
|
|
$
|
2,410
|
|
Year
|
|
Minimum Lease Payments
|
||
2018
|
|
$
|
21,084
|
|
2019
|
|
16,336
|
|
|
2020
|
|
11,652
|
|
|
2021
|
|
8,148
|
|
|
2022
|
|
5,245
|
|
|
Thereafter
|
|
7,818
|
|
|
Total
|
|
$
|
70,283
|
|
|
Total Fair Value at
December 31, 2017 |
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Forward Currency Contracts
|
$
|
186
|
|
|
$
|
—
|
|
|
$
|
186
|
|
|
$
|
—
|
|
Interest Rate Swaps
|
3,193
|
|
|
—
|
|
|
3,193
|
|
|
—
|
|
||||
Total
|
$
|
3,379
|
|
|
$
|
—
|
|
|
$
|
3,379
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Forward Currency Contracts
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
33
|
|
|
$
|
—
|
|
Total
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
33
|
|
|
$
|
—
|
|
|
Total Fair Value at
December 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
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
26
|
|
|
$
|
—
|
|
Interest Rate Swap
|
1,061
|
|
|
—
|
|
|
1,061
|
|
|
—
|
|
||||
Total
|
$
|
1,087
|
|
|
$
|
—
|
|
|
$
|
1,087
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Forward Currency Contracts
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
57
|
|
|
$
|
—
|
|
Total
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
57
|
|
|
$
|
—
|
|
|
Position
|
|
Notional
Amount
|
|
Weighted
Average
Remaining
Maturity
In Years
|
|
Average
Exchange
Rate
|
||
Canadian Dollar/USD
|
Sell
|
|
$
|
1,662,500
|
|
|
0.3
|
|
1.26
|
USD/British Pound
|
Sell
|
|
£
|
4,595,000
|
|
|
0.3
|
|
1.35
|
EURO/British Pound
|
Sell
|
|
£
|
2,568,300
|
|
|
0.3
|
|
0.89
|
USD/South African Rand
|
Sell
|
|
R
|
38,371,793
|
|
|
0.1
|
|
12.44
|
Interest Rate Swap
|
|
|
$
|
231,328,125
|
|
|
2.8
|
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Infrastructure Solutions
|
$
|
612,154
|
|
|
$
|
571,551
|
|
|
$
|
556,234
|
|
Corrosion Protection
|
456,139
|
|
|
401,469
|
|
|
437,921
|
|
|||
Energy Services
|
290,726
|
|
|
248,900
|
|
|
339,415
|
|
|||
Total revenues
|
$
|
1,359,019
|
|
|
$
|
1,221,920
|
|
|
$
|
1,333,570
|
|
|
|
|
|
|
|
||||||
Operating income (loss):
|
|
|
|
|
|
||||||
Infrastructure Solutions
(1)
|
$
|
(61,807
|
)
|
|
$
|
53,503
|
|
|
$
|
46,867
|
|
Corrosion Protection
(2)
|
12,437
|
|
|
1,809
|
|
|
(1,771
|
)
|
|||
Energy Services
(3)
|
6,197
|
|
|
(4,486
|
)
|
|
(25,150
|
)
|
|||
Total operating income (loss)
|
(43,173
|
)
|
|
50,826
|
|
|
19,946
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(16,001
|
)
|
|
(15,029
|
)
|
|
(16,044
|
)
|
|||
Interest income
|
145
|
|
|
166
|
|
|
218
|
|
|||
Other
|
(2,201
|
)
|
|
(694
|
)
|
|
(2,905
|
)
|
|||
Total other expense
|
(18,057
|
)
|
|
(15,557
|
)
|
|
(18,731
|
)
|
|||
Income (loss) before taxes on income
|
$
|
(61,230
|
)
|
|
$
|
35,269
|
|
|
$
|
1,215
|
|
|
|
|
|
|
|
||||||
Total assets:
|
|
|
|
|
|
||||||
Infrastructure Solutions
|
$
|
531,746
|
|
|
$
|
584,425
|
|
|
$
|
508,817
|
|
Corrosion Protection
|
329,848
|
|
|
424,007
|
|
|
489,519
|
|
|||
Energy Services
|
152,416
|
|
|
147,171
|
|
|
183,763
|
|
|||
Corporate
|
22,775
|
|
|
37,979
|
|
|
50,854
|
|
|||
Assets held for sale
|
70,314
|
|
|
—
|
|
|
21,060
|
|
|||
Total assets
|
$
|
1,107,099
|
|
|
$
|
1,193,582
|
|
|
$
|
1,254,013
|
|
|
|
|
|
|
|
||||||
Capital expenditures:
|
|
|
|
|
|
||||||
Infrastructure Solutions
|
$
|
16,680
|
|
|
$
|
19,834
|
|
|
$
|
7,657
|
|
Corrosion Protection
|
8,603
|
|
|
14,393
|
|
|
17,226
|
|
|||
Energy Services
|
2,713
|
|
|
2,514
|
|
|
2,202
|
|
|||
Corporate
|
2,834
|
|
|
2,019
|
|
|
2,369
|
|
|||
Total capital expenditures
|
$
|
30,830
|
|
|
$
|
38,760
|
|
|
$
|
29,454
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization:
|
|
|
|
|
|
||||||
Infrastructure Solutions
|
$
|
18,731
|
|
|
$
|
17,547
|
|
|
$
|
14,836
|
|
Corrosion Protection
|
15,598
|
|
|
18,792
|
|
|
18,834
|
|
|||
Energy Services
|
6,726
|
|
|
7,067
|
|
|
7,641
|
|
|||
Corporate
|
4,319
|
|
|
3,313
|
|
|
2,480
|
|
|||
Total depreciation and amortization
|
$
|
45,374
|
|
|
$
|
46,719
|
|
|
$
|
43,791
|
|
(1)
|
Operating loss for 2017 includes: (i)
$18.1 million
of restructuring charges (see Note 3); (ii)
$45.4 million
of goodwill impairment charges (see Note 2); (iii)
$41.0 million
of definite-lived intangible asset impairment charges (see Note 2); and (iv)
$0.7 million
of costs incurred related to the acquisition of Environmental Techniques. Operating income for 2016 includes: (i)
$2.9 million
of restructuring charges (see Note 3); (ii)
$2.7 million
of costs incurred related to the acquisitions of Underground Solutions, Fyfe Europe, LMJ and Concrete Solutions; (iii) inventory step up expense of
$3.6 million
recognized as part of the accounting for business combinations; and (iv) a gain of
$6.6 million
in connection with the settlement of
two
longstanding lawsuits (see Note 11). Operating income for 2015 includes
$8.1 million
of restructuring charges (see Note 3) and
$1.1 million
of costs incurred related to the acquisition of Underground Solutions.
|
(2)
|
Operating income for 2017 includes: (i)
$5.9 million
of restructuring charges (see Note 3); and (ii)
$2.3 million
of costs incurred related to the planned divestiture of Bayou. Operating income for 2016 includes
$4.6 million
of 2016 Restructuring charges (see Note 3). Operating loss for 2015 includes
$10.0 million
of goodwill impairment charges (see Note 2) and
$0.5 million
of acquisition related expenses.
|
(3)
|
Operating loss for 2016 includes
$8.2 million
of restructuring charges (see Note 3). Operating loss for 2015 includes
$33.5 million
of goodwill impairment charges (see Note 2) and
$0.3 million
of costs incurred related to the acquisition of Schultz.
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
(1)
|
|
|
|
|
|
||||||
United States
|
$
|
1,028,313
|
|
|
$
|
924,580
|
|
|
$
|
965,957
|
|
Canada
|
139,734
|
|
|
129,291
|
|
|
174,827
|
|
|||
Europe
|
71,839
|
|
|
60,238
|
|
|
56,474
|
|
|||
Other foreign
|
119,133
|
|
|
107,811
|
|
|
136,312
|
|
|||
Total revenues
|
$
|
1,359,019
|
|
|
$
|
1,221,920
|
|
|
$
|
1,333,570
|
|
|
|
|
|
|
|
||||||
Operating income (loss):
|
|
|
|
|
|
||||||
United States
|
$
|
(33,236
|
)
|
|
$
|
28,048
|
|
|
$
|
(18,959
|
)
|
Canada
|
12,220
|
|
|
16,156
|
|
|
27,126
|
|
|||
Europe
|
(3,771
|
)
|
|
981
|
|
|
3,217
|
|
|||
Other foreign
|
(18,386
|
)
|
|
5,641
|
|
|
8,562
|
|
|||
Total operating income (loss)
|
$
|
(43,173
|
)
|
|
$
|
50,826
|
|
|
$
|
19,946
|
|
|
|
|
|
|
|
||||||
Long-lived assets:
(1)(2)
|
|
|
|
|
|
||||||
United States
|
$
|
93,472
|
|
|
$
|
140,099
|
|
|
$
|
124,120
|
|
Canada
|
8,816
|
|
|
9,464
|
|
|
9,872
|
|
|||
Europe
|
13,435
|
|
|
7,575
|
|
|
7,268
|
|
|||
Other foreign
|
9,586
|
|
|
8,829
|
|
|
9,189
|
|
|||
Total long-lived assets
|
$
|
125,309
|
|
|
$
|
165,967
|
|
|
$
|
150,449
|
|
(1)
|
Revenues and long-lived assets 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.
|
(2)
|
Long-lived assets as of
December 31, 2017
,
2016
and
2015
do not include intangible assets, goodwill or deferred tax assets.
|
|
First
Quarter (1) |
|
Second
Quarter (2) |
|
Third
Quarter (3) |
|
Fourth
Quarter (4) |
||||||||
Year ended December 31, 2017:
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
325,175
|
|
|
$
|
354,473
|
|
|
$
|
341,872
|
|
|
$
|
337,499
|
|
Gross profit
|
67,412
|
|
|
79,768
|
|
|
73,442
|
|
|
64,190
|
|
||||
Operating income (loss)
|
14,133
|
|
|
21,659
|
|
|
(75,009
|
)
|
|
(3,956
|
)
|
||||
Net income (loss)
|
7,753
|
|
|
12,178
|
|
|
(73,782
|
)
|
|
(12,384
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per share attributable to Aegion Corporation:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.17
|
|
|
$
|
0.33
|
|
|
$
|
(2.23
|
)
|
|
$
|
(0.39
|
)
|
Diluted
|
$
|
0.17
|
|
|
$
|
0.33
|
|
|
$
|
(2.23
|
)
|
|
$
|
(0.39
|
)
|
(1)
|
Includes pre-tax expense reversals of
$(0.1) million
related to our restructuring efforts (see Note 3).
|
(2)
|
Includes pre-tax expenses of
$0.3 million
related to our restructuring efforts (see Note 3).
|
(3)
|
Includes pre-tax expenses of
$6.7 million
related to our restructuring efforts (see Note 3); pre-tax goodwill impairment charges of
$45.4 million
(see Note 2); and pre-tax definite-lived intangible asset impairment charges of
$41.0 million
(see Note 2).
|
(4)
|
Includes pre-tax expenses of
$17.1 million
related to our restructuring efforts (see Note 3).
|
|
First
Quarter
(1)
|
|
Second
Quarter
(2)
|
|
Third
Quarter
(3)
|
|
Fourth
Quarter
(4)
|
||||||||
Year ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues
|
$
|
293,908
|
|
|
$
|
297,686
|
|
|
$
|
308,524
|
|
|
$
|
321,802
|
|
Gross profit
|
54,414
|
|
|
61,190
|
|
|
66,318
|
|
|
71,242
|
|
||||
Operating income (loss)
|
(4,139
|
)
|
|
8,145
|
|
|
20,505
|
|
|
26,315
|
|
||||
Net income (loss)
|
(3,949
|
)
|
|
3,193
|
|
|
11,787
|
|
|
18,129
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per share attributable to Aegion Corporation:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.11
|
)
|
|
$
|
0.10
|
|
|
$
|
0.35
|
|
|
$
|
0.52
|
|
Net income (loss)
|
$
|
(0.11
|
)
|
|
$
|
0.10
|
|
|
$
|
0.34
|
|
|
$
|
0.52
|
|
(1)
|
Includes pre-tax expenses of
$9.5 million
related to our restructuring efforts (see Note 3).
|
(2)
|
Includes pre-tax expenses of
$3.9 million
related to our restructuring efforts (see Note 3).
|
(3)
|
Includes pre-tax expenses of
$0.9 million
related to our restructuring efforts (see Note 3).
|
(4)
|
Includes pre-tax expenses of
$1.6 million
related to our restructuring efforts (see Note 3), and a gain on litigation settlement of
$6.6 million
(see Note 11).
|
•
|
Consolidated financial leverage ratio compares consolidated funded indebtedness to amended Credit Facility defined income. The initial maximum amount is not to exceed
3.75
to 1.00 and will decrease periodically at scheduled reporting periods to not more than
3.50
to 1.00 beginning with the quarter ending September 30, 2018.
|
•
|
Consolidated fixed charge coverage ratio compares amended Credit Facility defined income to amended Credit Facility defined fixed charges. The initial minimum permitted ratio is not less than
1.15
to 1.00 and will increase to
1.25
to 1.00 beginning with the quarter ending December 31, 2018.
|
Dated: March 1, 2018
|
AEGION CORPORATION
|
|
|
|
|
|
|
|
By:
|
/s/ Charles R. Gordon
|
|
|
|
Charles R. Gordon
|
|
|
|
President and Chief Executive Officer
|
|
Signature
|
Title
|
Date
|
|
|
|
/s/ Charles R. Gordon
|
Principal Executive Officer and
|
March 1, 2018
|
Charles R. Gordon
|
Director
|
|
|
|
|
/s/ David F. Morris
|
Principal Financial Officer
|
March 1, 2018
|
David F. Morris
|
|
|
|
|
|
/s/ Michael D. White
|
Principal Accounting Officer
|
March 1, 2018
|
Michael D. White
|
|
|
|
|
|
/s/ Stephen P. Cortinovis
|
Director
|
March 1, 2018
|
Stephen P. Cortinovis
|
|
|
|
|
|
/s/ Stephanie A. Cuskley
|
Director
|
March 1, 2018
|
Stephanie A. Cuskley
|
|
|
|
|
|
/s/ Walter J. Galvin
|
Director
|
March 1, 2018
|
Walter J. Galvin
|
|
|
|
|
|
/s/ Rhonda Germany Ballintyn
|
Director
|
March 1, 2018
|
Rhonda Germany Ballintyn
|
|
|
|
|
|
/s/ Juanita H. Hinshaw
|
Director
|
March 1, 2018
|
Juanita H. Hinshaw
|
|
|
|
|
|
/s/ M. Richard Smith
|
Director
|
March 1, 2018
|
M. Richard Smith
|
|
|
|
|
|
/s/ Alfred L. Woods
|
Director
|
March 1, 2018
|
Alfred L. Woods
|
|
|
|
|
|
/s/ Phillip D. Wright
|
Director
|
March 1, 2018
|
Phillip D. Wright
|
|
|
10.13
|
|
|
|
10.14
|
|
|
|
10.15
|
|
|
|
10.16
|
|
|
|
10.17
|
|
|
|
10.18
|
|
|
|
10.19
|
|
|
|
10.20
|
|
|
|
10.21
|
|
|
|
10.22
|
|
|
|
10.23
|
|
|
|
10.24
|
|
|
|
10.25
|
|
|
|
10.26
|
|
|
|
10.27
|
|
|
|
10.28
|
|
|
|
21
|
|
|
|
23
|
|
|
|
24
|
Power of Attorney (set forth on signature page).
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
32.2
|
|
|
|
95
|
|
|
|
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*
|
(1)
|
The Company’s current, quarterly and annual reports are filed with the Securities and Exchange Commission under file no. 001-35328.
|
(2)
|
Management contract or compensatory plan or arrangement.
|
(i)
|
operating results and/or losses associated with the write-down of assets of a subsidiary, business unit or division that has been designated by the Board of Directors as a discontinued business operation or to be liquidated;
|
(ii)
|
gains or losses on the sale of any subsidiary, business unit or division, or the assets or business thereof;
|
(iii)
|
gains or losses from the disposition of material capital assets (other than in a transaction described in subsection (ii)) or the refinancing of indebtedness, including, among other things, any make-whole payments and prepayment fees;
|
(iv)
|
losses associated with the write-down of goodwill or other intangible assets of the Company due to the determination under applicable accounting standards that the assets have been impaired;
|
(v)
|
gains or losses from material property casualty occurrences or condemnation awards, taking into account the proceeds paid by insurance companies and other third parties in connection with the casualty or condemnation;
|
(vi)
|
any income statement effect resulting from a change in tax laws, accounting principles (including, without limitation, generally accepted accounting principles), regulations, or other laws regulations affecting reported results, except, in each case, to the extent the effect of such a change is already reflected in the target EBT amount;
|
(vii)
|
reorganization or restructuring charges and acquisition- or divestiture-related transaction expenses and costs;
|
(viii)
|
any gains or losses from unusual nonrecurring or extraordinary items;
|
(ix)
|
operating results of any entity or business acquired or disposed of during the Plan Year, except, in the case of an acquisition, to the extent such entity or business was included in the Company’s operating business plan for the Plan Year or, in the case of a disposition, to the extent such entity or business was not included in the Company’s operating business plan for the Plan Year;
|
(x)
|
any gain or loss resulting from currency fluctuations or translations as set forth in the Aegion Corporation Foreign Exchange Rate Policy for Annual Incentive Plan and Long-Term Incentive Plan;
|
(xi)
|
any material income or loss item the realization of which is not directly attributable to the actions of current senior management of the Company; and
|
(xii)
|
the income taxes (benefits) of any of the above-designated gains or losses.
|
1.
|
If Actual EBT equals the EBT Target, the portion of the Consolidated Company Financial Performance Pool related to EBT shall be equal to the portion Company Target Funding Amount related to EBT, subject to the additional terms specified in Exhibit A.
|
2.
|
If Actual EBT exceeds or falls below the EBT Target, the portion of Consolidated Company Financial Performance Pool related to EBT shall be determined in accordance with the chart in Exhibit A (using interpolation for Actual EBT levels as specified therein), and subject to the additional terms specified therein.
|
3.
|
If Actual EBT is less than the threshold percentage of the EBT Target specified in the chart in Exhibit A, the maximum amount funded to the Consolidated Company Financial Performance Pool shall be equal to $1,000,000; provided, however, that (i) such minimum amount shall only be awarded to individual Participants for extraordinary performance, as determined by the Company’s Chief Executive Officer in his sole discretion (subject to the review and approval by the Compensation Committee of any Awards to executive officers of the Company); (ii) such minimum amount shall be reduced such that any funding under this paragraph and the similar mechanism in Section F(14) of the Management Annual Incentive Plan for Business Unit Employees shall together total $1,000,000.
|
4.
|
If Actual Bookings equals the Bookings Target, the portion of the Consolidated Company Financial Performance Pool related to Bookings shall be equal to the portion of Company Target Funding Amount related to Bookings, subject to the additional terms specified in Exhibit B.
|
5.
|
If Actual Bookings exceeds or falls below the Bookings Target, the portion of the Consolidated Company Financial Performance Pool related to Bookings shall be determined in accordance with the chart in Exhibit B (using interpolation for Actual Bookings levels as specified therein), and subject to the additional terms specified therein.
|
6.
|
If Actual Bookings are less than the threshold percentage of the Bookings Target (after the threshold percentage has been determined by the Chief Executive Officer in his sole discretion, per Exhibit B), the amount funded to the Consolidated Company Financial Performance Pool shall be equal to $0.
|
•
|
Participants who are executive officers of the Company on June 30, 2018
|
•
|
Participants who are in Tiers 0-2.5 and are direct reports of the Chief Executive Officer on June 30, 2018
|
•
|
Participants who are executive officers of the Company on December 31, 2018
|
•
|
Participants who are in Tiers 0-2.5 and are direct reports of the Chief Executive Officer on December 31, 2018
|
•
|
If actual EBT is less than 85% of the EBT Target, the Consolidated Company Financial Performance Pool shall not be funded (subject to Section F(3)).
|
•
|
If actual EBT is at least 85% of the EBT Target but less than 100% of EBT Target, each Participant shall be eligible to receive a minimum of 75% of his/her Goal.
|
•
|
If actual EBT is at least 100% of the EBT Target but less than 110% of EBT Target, each Participant shall be eligible to receive a minimum of 100% of his/her Goal.
|
•
|
If actual EBT is at least 110% of the EBT Target but less than 120% of EBT Target, each Participant shall be eligible to receive a minimum of 150% of his/her Goal.
|
•
|
If actual EBT is at least 120% of the EBT Target, each Participant shall be eligible to receive 200% of his/her Goal.
|
•
|
To the extent the Company’s actual EBT is greater than 85% of Target EBT but less than 100% of Target EBT, or greater than 100% of Target EBT but less than 120% of Target EBT, the payout level shall be calculated based on a straight-line, sliding scale using the performance levels (85% and 100%, on the one hand, and 100% and 120%, on the other hand) between which the Company’s actual performance falls as the end points for this calculation.
|
•
|
50% of the target payout for each Sales Participant shall be based on EBT, as described in Section I, and as set forth in the payout scale in Exhibit A.
|
•
|
50% of the target payout for each Sales Participant shall be based on Bookings, as set forth in the payout scale in Exhibit B, and in accordance with the following parameters:
|
◦
|
If Actual Bookings are less than 95% of the Bookings Target (at 100%), the Consolidated Company Financial Performance Pool shall not be funded with respect to Bookings.
|
◦
|
The Target Payout percentage for the threshold Bookings Target for Company Participants with Bookings Goals also shall be equal to the average of the percentage of Target Payout for each of the three Senior Vice Presidents of Sales for the Company’s three platforms.
|
◦
|
To the extent the Company’s Actual Bookings are greater than the threshold Bookings Target but less than 100% of Bookings Target, or greater than 100% of the Bookings Target but less than the maximum Bookings Target, the payout level of the Annual Award shall be calculated based on a straight-line, sliding scale using the performance levels (threshold and target, on the one hand, and target and maximum, on the other hand) between which the Company’s Actual Bookings performance falls as the end points for this calculation.
|
•
|
Payouts shall be reduced by 17% if the Company fails to achieve its Company consolidated DSO target for 2018.
|
◦
|
For Participants who do not impact DSOs, payouts shall be reduced by up to 17% for failure to meet individual performance goals
|
•
|
Payouts shall be reduced by 8.5% if the Company fails to achieve its Company consolidated Total Recordable Incident Rate (“TRIR”) goal for 2018.
|
•
|
Payout shall be reduced by 8.5% if the Company fails to achieve its Company consolidated Lost Time Injury Rate (“LTIR”) goal for 2018.
|
•
|
Annual Awards shall be offset by amounts paid for 1H2018 and H2018 Awards. In the event that a Participant receives a 1H2018 and/or 2H2018 Award, but is not eligible for an Annual Award due to failure to meet the Annual EBT threshold, the Participant will not be required to pay back the 1H2018 and/or 2H2018 Award or any portion thereof.
|
a.
|
If the Company fails to achieve the threshold levels for either of the TSR Goal or the ROIC Goal for the Performance Period, no Performance Units attributable to that Performance Goal shall vest for the Performance Period.
|
b.
|
If the Company achieves the threshold level of the TSR Goal for the Performance Period, 18.75% of the maximum Performance Units under this Agreement shall vest.
|
c.
|
If the Company achieves the target level of the TSR Goal for the Performance Period, 37.5% of the maximum Performance Units under this Agreement shall vest.
|
d.
|
If the Company achieves the maximum level of the TSR Goal for the Performance Period, 75% of the maximum Performance Units under this Agreement shall vest.
|
e.
|
If the Company’s actual TSR performance for the Performance Period is negative, in no instance shall more than 37.5% of the maximum Performance Units under this Agreement vest with respect to the TSR Goal.
|
a.
|
If the Company achieves the threshold level for the ROIC Goal for the Performance Period, 6.25% of the maximum Performance Units under this Agreement shall vest.
|
b.
|
If the Company achieves the target level for the ROIC Goal for the Performance Period, 12.5% of the maximum Performance Units under this Agreement shall vest.
|
c.
|
If the Company achieves the maximum level for the ROIC Goal for the Performance Period, 25% of the maximum Performance Units under this Agreement shall vest.
|
(i)
|
In the event that, at any time during the Performance Period, a Custom Peer Company is no longer included in the S&P Small Cap Industrial Index, such company shall no longer be a Custom Peer Company, unless such Custom Peer Company was in the Custom Peer Group by virtue of being in Aegion’s current 18-company compensation peer group.
|
(ii)
|
In the event of a merger, acquisition or business combination transaction of a Custom Peer Company with or by another Custom Peer Company, the surviving entity shall remain a Custom Peer Company, without adjustment to its financial or market structure, provided that the surviving entity is still in the S&P Small Cap Industrial Index;
provided
,
however
, that, if one or both of the Custom Peer Group companies referred to in this subsection (ii) are not in the S&P Small Cap Industrial Index, the Compensation Committee shall make a determination whether such surviving entity should appropriate remain in the Custom Peer Group.
|
(iii)
|
In the event of a merger of a Custom Peer Company with or by an entity that is not a Custom Peer Company, or the acquisition or business combination transaction by a member of the Custom Peer Group of or with an entity that is not a Custom Peer Company, in each case, where the Custom Peer Company is the surviving entity, the surviving entity shall remain a Custom Peer Company, without adjustment to its financial or market structure, provided that the surviving entity is still in the S&P Small Cap Industrial Index;
provided
,
however
, that, if the Custom Peer Company involved in the merger, acquisition or business combination transaction described in this subsection (iii) above is not in the S&P Small Cap Industrial Index, the Compensation Committee shall make a determination whether such surviving entity should appropriate remain in the Custom Peer Group.
|
(i)
|
breaching any employment, confidentiality, noncompete, nonsolicitation or other agreement with the Company, any written Company policy relating to compliance with laws (during employment) or any general undertaking or legal obligation to the Company;
|
(ii)
|
causing, inducing, requesting or advising, or attempting to cause, induce, request or advise, any employee, representative, consultant or other similar person to terminate his/her relationship, or breach any agreement, with the Company;
|
(iii)
|
causing, inducing, requesting or advising, or attempting to cause, induce, request or advise, any customer, supplier or other Company business contact to withdraw, curtail or cancel its business with the Company; or
|
(iv)
|
failing or refusing to perform any stated duty or assignment, misconduct, disloyalty, violating any Company policy or work rule, engaging in criminal conduct in connection with your employment, being indicted or charged with any crime constituting a felony or involving dishonesty or moral turpitude, violating any term in this Agreement, unsatisfactory job performance, or any other reason constituting cause within the meaning of Missouri common law.
|
(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
|
(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.
|
(i
)
|
a material reduction or alteration in the nature or status of your authorities, duties, or responsibilities from those in effect as of 90 calendar days prior to the Change
in
Control, other than an insubstantial and inadvertent act that is remedied by the Company or the Successor promptly after receipt of notice thereof given by you;
|
(ii)
|
the Company’s or the Successor’s requiring you to be based at a location in excess of 50 miles from the location of your principal job location or office in effect as of 90 calendar days prior to the Change
in
Control
,
except for required travel on the Company’s or the Successor’s business to an extent substantially consistent with your then present business travel obligations;
|
(iii)
|
a material reduction by the Company or the Successor of your base salary in effect as of 90 calendar days prior to the Change in Control; or
|
(iv)
|
the failure of the Company or the Successor to continue in effect any of the Company’s short- and long-term incentive compensation plans, or employee benefit or retirement plans, policies, practices, or other compensation arrangements in which you participate taken as a whole unless such failure to continue the plan, policy, practice, or arrangement pertains to all plan participants generally; or the failure by the Company or the Successor to continue your participation therein on substantially the same basis, both in terms of the amount of benefits provided and the level of your participation relative to other participants, as existed 90 calendar days prior to the Change in Control.
|
(a)
|
the third anniversary of the Date of Award;
|
(b)
|
your death;
|
(c)
|
the termination of your employment as a result of your Disability (as defined in this Section 3 below);
|
(d)
|
the termination of your employment as a result of your retirement (retirement means your voluntary termination of your employment with the Company and its subsidiaries following (i) your attainment of the age of 55 with at least 10 years of full-time service to the Company and/or its subsidiaries, (ii) your attainment of the age of 60 with at least five years of full-time service to the Company and/or its subsidiaries, or (iii) your attainment of the age of 65 (with no minimum full time service requirements with the Company and/or its subsidiaries),
provided, however,
that the number of Restricted Stock Units that shall vest shall be determined by (a)
dividing
(i) the number of whole calendar months (e.g., July 1 through July 31) of your employment with the Company or its subsidiaries during the period beginning on the Date of Award and ending on the date of termination of your employment by (ii) 36; and (b)
multiplying
the percentage determined under subsection (a) immediately above by the number of Restricted Stock Units awarded to you pursuant to this Agreement;
|
(e)
|
upon involuntary termination of your employment without “Cause” (as defined in this Section 3 below) at least 18 months after the Date of Award but prior to a Change in Control. In such case, the number of Restricted Stock Units awarded to you pursuant to this Agreement that shall vest shall be determined by (a)
dividing
(i) the number of whole calendar months (e.g., July 1 through July 31) of your employment with the Company or one of its subsidiaries during the period beginning on the Date of Award and ending on the date of termination of your employment by (ii) 36; and (b)
multiplying
the percentage determined under subsection (a) immediately above by the number of Restricted Stock Units awarded to you pursuant to this Agreement;
|
(f)
|
upon a termination of your employment by the Company or its subsidiaries (or the Successor (as defined in this subsection below) or its subsidiaries, as the case may be) without “Cause” (as defined in this Section 3 below) or a termination of your employment by you for “Good Reason” (as defined in this Section 3 below), each after a Change in Control in which the successor organization (the “Successor”) substituted the Restricted Stock Units awarded pursuant to this Agreement with a Substitute Equivalent Award; or
|
(g)
|
immediately prior to a Change in Control if the Restricted Stock Units awarded pursuant to this Agreement is not substituted with a Substitute Equivalent Award by the Successor.
|
(i)
|
breaching any employment, confidentiality, noncompete, nonsolicitation or other agreement with the Company, any written Company policy relating to compliance with laws (during employment) or any general undertaking or legal obligation to the Company;
|
(ii)
|
causing, inducing, requesting or advising, or attempting to cause, induce, request or advise, any employee, representative, consultant or other similar person to terminate his/her relationship, or breach any agreement, with the Company;
|
(iii)
|
causing, inducing, requesting or advising, or attempting to cause, induce, request or advise, any customer, supplier or other Company business contact to withdraw, curtail or cancel its business with the Company; or
|
(iv)
|
failing or refusing to perform any stated duty or assignment, misconduct, disloyalty, violating any Company policy or work rule, engaging in criminal conduct in connection with your employment, being indicted or charged with any crime constituting a felony or involving dishonesty or moral turpitude, violating any term in this Agreement, unsatisfactory job performance, or any other reason constituting cause within the meaning of Missouri common law.
|
(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.
|
(i)
|
a material reduction or alteration in the nature or status of your authorities, duties, or responsibilities from those in effect as of 90 calendar days prior to the Change in Control, other than an insubstantial and inadvertent act that is remedied by the Company or the Successor promptly after receipt of notice thereof given by you;
|
(ii)
|
the Company’s or the Successor’s requiring you to be based at a location in excess of 50 miles from the location of your principal job location or office in effect as of 90 calendar days prior to the Change in Control
,
except for required travel on the Company’s or the Successor’s business to an extent substantially consistent with your then present business travel obligations;
|
(iii)
|
a material reduction by the Company or the Successor of your base salary in effect as of 90 calendar days prior to the Change in Control; or
|
(iv)
|
the failure of the Company or the Successor to continue in effect any of the Company’s short- and long-term incentive compensation plans, or employee benefit or retirement plans, policies, practices, or other compensation arrangements in which you participate taken as a whole unless such failure to continue the plan, policy, practice, or arrangement pertains to all plan participants generally; or the failure by the Company or the Successor to continue your participation therein on substantially the same basis, both in terms of the amount of benefits provided and the level of your participation relative to other participants, as existed 90 calendar days prior to the Change in Control.
|
(i)
|
has a value at least equal to the value of the Restricted Stock Units awarded pursuant to this Agreement as determined by the Compensation Committee in its sole discretion;
|
(ii)
|
relates to a publicly-traded equity security of the Successor involved in the Change in Control or another entity that is affiliated with the Company or the Successor following the Change in Control;
|
(iii)
|
is the same type of award as the Award; and
|
(iv)
|
has other terms and conditions that are not less favorable to you than the terms and conditions of the Restricted Stock Units awarded pursuant to this Agreement, as determined by the Compensation Committee in its sole discretion.
|
Company Name
|
Jurisdiction of Formation
|
Aegion Coating Services, LLC
|
Texas
|
Aegion Corrosion Protection Holdings Limited
|
England & Wales
|
Aegion Cyprus Limited
|
Cyprus
|
Aegion Energy Services, Inc.
|
Delaware
|
Aegion Holding Company, LLC
|
Delaware
|
Aegion International Holdings Limited
|
England & Wales
|
Aegion International Limited
|
England & Wales
|
Aegion International Services, Inc.
|
Delaware
|
Aegion Rehabilitation Services Limited
|
England & Wales
|
Aegion Saudi Arabia Company
|
Saudi Arabia
|
Aegion South Africa (Pty) Ltd
1
|
South Africa
|
AllSafe Services, Inc.
|
Delaware
|
Bayou Wasco Insulation, LLC
2
|
Delaware
|
Brinderson Constructors, Inc.
|
California
|
Brinderson Services, LLC
|
Delaware
|
Brinderson, LP
|
California
|
Building Chemical Supplies Limited
|
New Zealand
|
Concrete Solutions Limited
|
New Zealand
|
Corrpower International Limited
3
|
Saudi Arabia
|
Corrpro Canada Holdings, Inc.
|
Delaware
|
Corrpro Canada, Inc.
|
Alberta, Canada
|
Corrpro Companies Engineering Limited
|
England & Wales
|
Corrpro Companies Europe Ltd.
|
England & Wales
|
Corrpro Companies International, Inc.
|
Nevada
|
Corrpro Companies, Inc.
|
Ohio
|
Corrpro Holdings, LLC
|
Delaware
|
DEH Services, LLC
|
Louisiana
|
Environmental Techniques Limited
|
Northern Ireland
|
Fibrwrap Construction (M) Sdn Bhd
|
Malaysia
|
Fibrwrap Construction Chile S.A.
4
|
Chile
|
Fibrwrap Construction Colombia S.A.S.
|
Colombia
|
Fibrwrap Construction LatinAmerica S.A.
|
Panama
|
Fibrwrap Construction Pte Ltd
|
Singapore
|
Fibrwrap Construction Services Ltd.
|
British Columbia, Canada
|
Fibrwrap Construction Services USA, Inc.
|
Delaware
|
Fibrwrap Construction Services, Inc.
|
Delaware
|
Fyfe - Latin America S.A.
|
Panama
|
Fyfe - Latin America S.A. de C.V.
|
El Salvador
|
Fyfe (Hong Kong) Limited
|
Hong Kong
|
Fyfe Asia Pte. Ltd.
|
Singapore
|
Fyfe Borneo Sdn Bhd
5
|
Brunei
|
Fyfe Co. LLC
|
Delaware
|
Fyfe International Holdings B.V.
|
Netherlands
|
Fyfe Japan Co. Ltd.
|
Japan
|
General Energy Services
|
California
|
Hockway Middle East FZE
|
Dubai Silicon Oasis, UAE
|
Hockway Middle East FZE
|
Ras Al Khaimah, UAE
|
INA Acquisition Corp.
|
Delaware
|
Infrastructure Group Holdings, LLC
|
Delaware
|
Insitu Envirotech (S.E. Asia) Pte. Ltd.
|
Singapore
|
Insituform A/S
|
Denmark
|
Insituform Asia Limited
|
Hong Kong
|
Insituform C.V.
|
Netherlands
|
Insituform Cyprus Limited
|
Cyprus
|
Insituform Europe SAS
|
France
|
Insituform Holdings (UK) Limited
|
England & Wales
|
Insituform Holdings B.V.
|
Netherlands
|
Insituform Hong Kong Limited
|
Hong Kong
|
Insituform Limited Partnership
|
New Brunswick, Canada
|
Insituform Linings Asia Sdn Bhd
|
Malaysia
|
Insituform Linings Limited
|
England & Wales
|
Insituform Netherlands Holdings, LLC
|
Delaware
|
Insituform Pacific Pty Limited
|
Australia
|
Insituform Pipeline Rehabilitation Private Limited
|
India
|
Insituform Rioolrenovatietechnieken B.V.
|
Netherlands
|
Insituform Singapore Pte. Ltd.
|
Singapore
|
Insituform sp. z o.o.
|
Poland
|
Insituform SPML JV
6
|
India
|
Insituform Sverige AB
|
Sweden
|
Insituform Technologies C.V.
|
Netherlands
|
Insituform Technologies Ibérica S.A.
|
Spain
|
Insituform Technologies Limited
|
Alberta, Canada
|
Insituform Technologies Limited
|
England & Wales
|
Insituform Technologies Netherlands B.V.
|
Netherlands
|
Insituform Technologies Netherlands Holdings, LLC
|
Delaware
|
Insituform Technologies USA, LLC
|
Delaware
|
Insituform Technologies, LLC
|
Delaware
|
Killeen Trading Limited
|
Northern Ireland
|
Manufactured Technologies Corporation
|
Mississippi
|
Nu Pipe Limited
|
England & Wales
|
PT Fyfe Fibrwrap Indonesia
7
|
Indonesia
|
Schultz Industrial Services, Inc.
|
California
|
Technologie & Art Pte. Ltd.
|
Singapore
|
The Bayou Companies, LLC
|
Delaware
|
Underground Solutions Technologies Group, Inc.
|
Pennsylvania
|
Underground Solutions, Inc.
|
Delaware
|
United Pipeline de Mexico S.A. de C.V.
8
|
Mexico
|
United Pipeline Middle East, Inc.
|
Delaware
|
United Pipeline Systems International, Inc.
|
Delaware
|
United Pipeline Systems Limited
|
Alberta, Canada
|
United Pipeline Systems, Inc.
|
Nevada
|
United Pipelines Inversiones Limitada
|
Chile
|
United Pipelines SRL
|
Argentina
|
United Sistema de Tuberias Limitada
|
Chile
|
United Sistemas de Revestimento em Tubulações Ltda.
|
Brazil
|
United Special Technical Services LLC
9
|
Oman
|
UPS-Aptec Limited
10
|
England & Wales
|
Wilson Walton (Portugal) Anti Corrosivos Ltd.
|
Portugal
|
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)
|
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 F. Morris
|
David F. Morris
Executive Vice President and Interim Chief Financial Officer
(Principal Financial Officer)
|
(1)
|
the Form 10-K 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-K 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-K 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-K fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ David F. Morris
|
David F. Morris
Executive Vice President and Interim Chief Financial Officer
(Principal Financial Officer)
|
Mine or Operating Name / MSHA Identification Number
|
Section 104 S&S Citations
(#)
|
Section 104(b) Orders
(#)
|
Section 104(d) Citations and Orders
(#)
|
Section 110(b)(2) Violations
(#)
|
Section 107(a) Orders
(#)
|
Total Dollar Value of MSHA Assessments Proposed
($)
|
Total Number of Mining Related Fatalities
(#)
|
Received Notice of Pattern of Violations Under Section 104(e)
(yes/no)
|
Received Notice of Potential to Have Pattern Under Section 104(e)
(yes/no)
|
Legal Actions Pending as of 12/31/2017
(#)
|
Legal Actions Initiated during 2017
(#)
|
Legal Actions Resolved During 2017
(#)
|
Barrick Goldstrike Mines Inc. / 2601089
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
no
|
no
|
0
|
0
|
0
|
Genesis Alkali, LLC /
4800152
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
no
|
no
|
0
|
0
|
0
|
Newmont USA Limited / 2600550
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
no
|
no
|
0
|
0
|
0
|
Bingham Canyon Mine / 4200149
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
no
|
no
|
0
|
0
|
0
|