|
þ QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
¨ TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
PART
I—FINANCIAL INFORMATION
|
|
Item 1. Financial
Statements:
|
|
3
|
|
4
|
|
5
|
|
6
|
|
7
|
|
19
|
|
30
|
|
31
|
|
PART
II—OTHER INFORMATION
|
|
32
|
|
32
|
|
32
|
|
32
|
|
32
|
|
33
|
|
34
|
For
the Three Months
Ended
March 31,
|
||||||||
2009
|
2008
|
|||||||
Revenues
|
$ 128,012 | $ 125,927 | ||||||
Cost
of revenues
|
97,339 | 99,041 | ||||||
Gross
profit
|
30,673 | 26,886 | ||||||
Acquisition-related
costs
|
8,219 | – | ||||||
Operating
expenses
|
22,375 | 23,631 | ||||||
Operating
income
|
79 | 3,255 | ||||||
Other
income (expense):
|
||||||||
Interest
expense
|
(1,124 | ) | (1,227 | ) | ||||
Interest
income
|
349 | 848 | ||||||
Other
|
(82 | ) | 767 | |||||
Total
other income (expense)
|
(857 | ) | 388 | |||||
Income
(loss) before taxes
|
(778 | ) | 3,643 | |||||
Taxes
on income (benefit)
|
(411 | ) | 1,074 | |||||
Income
(loss) before equity in losses of affiliated companies
|
(367 | ) | 2,569 | |||||
Equity
in losses of affiliated companies, net of tax
|
(315 | ) | (383 | ) | ||||
Income
(loss) before discontinued operations
|
(682 | ) | 2,186 | |||||
Loss
from discontinued operations, net of tax
|
(98 | ) | (87 | ) | ||||
Net
income (loss)
|
(780 | ) | 2,099 | |||||
Less:
net income attributable to noncontrolling interests
|
425 | 156 | ||||||
Net
income (loss) attributable to common stockholders
|
$ (1,205 | ) | $ 1,943 | |||||
Earnings
(loss) per share attributable to common stockholders:
|
||||||||
Basic:
|
||||||||
Income
(loss) from continuing operations
|
$ (0.04 | ) | $ 0.07 | |||||
Loss
from discontinued operations
|
(0.00 | ) | (0.00 | ) | ||||
Net
income (loss)
|
$ (0.04 | ) | $ 0.07 | |||||
Diluted:
|
||||||||
Income
(loss) from continuing operations
|
$ (0.04 | ) | $ 0.07 | |||||
Loss
from discontinued operations
|
(0.00 | ) | (0.00 | ) | ||||
Net
income (loss)
|
$ (0.04 | ) | $ 0.07 |
March 31,
2009
|
December 31,
2008
|
|||||||
Assets
|
||||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ 77,471 | $ 99,321 | ||||||
Restricted
cash
|
1,378 | 1,829 | ||||||
Receivables,
net
|
127,353 | 97,257 | ||||||
Retainage
|
20,141 | 21,380 | ||||||
Costs
and estimated earnings in excess of billings
|
57,522 | 37,224 | ||||||
Inventories
|
30,431 | 16,320 | ||||||
Prepaid
expenses and other assets
|
34,992 | 37,637 | ||||||
Current
assets of discontinued operations
|
11,784 | 13,704 | ||||||
Total
current assets
|
361,072 | 324,672 | ||||||
Property, plant and
equipment, less accumulated depreciation
|
131,506 | 71,423 | ||||||
Other
assets
|
||||||||
Goodwill
|
179,083 | 122,961 | ||||||
Identified
intangible assets, less accumulated amortization
|
75,485 | 10,353 | ||||||
Investments
in affiliated companies
|
32,432 | 6,769 | ||||||
Other
assets
|
16,237 | 7,285 | ||||||
Total
other assets
|
303,237 | 147,368 | ||||||
Non-current
assets of discontinued operations
|
5,026 | 5,843 | ||||||
Total
Assets
|
$ 800,841 | $ 549,306 | ||||||
Liabilities and Equity
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable and accrued expenses
|
$ 130,030 | $ 97,593 | ||||||
Billings
in excess of costs and estimated earnings
|
9,529 | 9,596 | ||||||
Current
maturities of long-term debt and line of credit
|
17,500 | – | ||||||
Notes
payable
|
1,941 | 938 | ||||||
Current
liabilities of discontinued operations
|
1,329 | 1,541 | ||||||
Total
current liabilities
|
160,329 | 109,668 | ||||||
Long-term debt,
less current maturities
|
105,000 | 65,000 | ||||||
Other
liabilities
|
33,336 | 2,831 | ||||||
Non-current
liabilities of discontinued operations
|
887 | 818 | ||||||
Total
liabilities
|
299,552 | 178,317 | ||||||
Stockholders’
equity
|
||||||||
Preferred
stock, undesignated, $.10 par – shares authorized 2,000,000; none
outstanding
|
– | – | ||||||
Common
stock, $.01 par – shares authorized 60,000,000; shares issued and
outstanding
38,830,853 and
27,977,785, respectively
|
388 | 280 | ||||||
Additional
paid-in capital
|
239,332 | 109,235 | ||||||
Retained
earnings
|
259,411 | 260,616 | ||||||
Accumulated
other comprehensive loss
|
(1,246 | ) | (2,154 | ) | ||||
Total
stockholders’ equity before noncontrolling interests
|
497,885 | 367,977 | ||||||
Noncontrolling
interests
|
3,404 | 3,012 | ||||||
Total
equity
|
501,289 | 370,989 | ||||||
Total
Liabilities and Equity
|
$ 800,841 | $ 549,306 |
Common
Stock
|
Additional
Paid-In
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
Non
controlling
Interests
|
Total
Equity
|
Comprehensive
Income
(Loss)
|
||||||||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||||||||||
BALANCE,
December 31, 2007
|
27,470,623 | $ 275 | $ 104,332 | $ 238,976 | $ 8,958 | $ 2,717 | $ 355,258 | |||||||||||||||||||||||||
Net
income
|
– | – | – | 1,943 | – | 156 | 2,099 | $ 2,099 | ||||||||||||||||||||||||
Distribution
of shares pursuant to Deferred Stock Unit awards
|
17,382 | – | – | – | – | – | – | |||||||||||||||||||||||||
Restricted
stock units issued
|
286,677 | 3 | – | – | – | – | 3 | – | ||||||||||||||||||||||||
Amortization
and forfeitures of restricted stock shares and units
|
(24,005 | ) | – | (13 | ) | – | – | – | (13 | ) | – | |||||||||||||||||||||
Equity
based compensation expense
|
– | – | 901 | – | – | – | 901 | – | ||||||||||||||||||||||||
Foreign
currency translation adjustment
|
– | – | – | – | 1,659 | 22 | 1,681 | 1,681 | ||||||||||||||||||||||||
Total
comprehensive income
|
$ 3,780 | |||||||||||||||||||||||||||||||
BALANCE,
March 31, 2008
|
27,750,677 | $ 278 | $ 105,220 | $ 240,919 | $ 10,617 | $ 2,895 | $ 359,929 | |||||||||||||||||||||||||
BALANCE,
December 31, 2008
|
27,977,785 | $ 280 | $ 109,235 | $ 260,616 | $ (2,154 | ) | $ 3,012 | $ 370,989 | ||||||||||||||||||||||||
Net
income (loss)
|
– | – | – | (1,205 | ) | – | 425 | (780 | ) | $ (780 | ) | |||||||||||||||||||||
Issuance
of common stock
|
10,499,766 | 105 | 130,226 | – | – | – | 130,331 | – | ||||||||||||||||||||||||
Restricted
stock units issued
|
383,615 | 4 | – | – | – | – | 4 | – | ||||||||||||||||||||||||
Amortization
and forfeitures of restricted stock shares and units
|
(30,313 | ) | (1 | ) | – | – | – | – | (1 | ) | – | |||||||||||||||||||||
Stock
offering costs
|
– | – | (997 | ) | – | – | – | (997 | ) | – | ||||||||||||||||||||||
Equity
based compensation expense
|
– | – | 868 | – | – | – | 868 | – | ||||||||||||||||||||||||
Foreign
currency translation adjustment
|
– | – | – | – | 908 | (33) | 875 | 875 | ||||||||||||||||||||||||
Total
comprehensive income (loss)
|
$ 95 | |||||||||||||||||||||||||||||||
BALANCE,
March 31, 2009
|
38,830,853 | $ 388 | $ 239,332 | $ 259,411 | $ (1,246 | ) | $ 3,404 | $ 501,289 | ||||||||||||||||||||||||
For
the Three Months
Ended
March 31,
|
||||||||
2009
|
2008
|
|||||||
Cash flows from
operating activities:
|
||||||||
Net
income (loss) attributable to common stockholders
|
$ (1,205 | ) | $ 1,943 | |||||
Loss
from discontinued operations
|
(98 | ) | (87 | ) | ||||
Income
(loss) from continuing operations
|
(1,107 | ) | 2,030 | |||||
Adjustments
to reconcile to net cash provided by (used in) operating
activities:
|
||||||||
Depreciation
and amortization
|
4,940 | 3,968 | ||||||
Gain
on sale of fixed assets
|
(101 | ) | (1,118 | ) | ||||
Equity-based
compensation expense
|
868 | 901 | ||||||
Deferred
income taxes
|
(903 | ) | (2,021 | ) | ||||
Other
|
(4,215 | ) | (1,784 | ) | ||||
Changes
in operating assets and liabilities:
|
||||||||
Restricted
cash
|
439 | (294 | ) | |||||
Receivables
net, retainage and costs and estimated earnings in excess of
billings
|
(5,643 | ) | 2,228 | |||||
Inventories
|
935 | 1 | ||||||
Prepaid
expenses and other assets
|
1,176 | (1,496 | ) | |||||
Accounts
payable and accrued expenses
|
(152 | ) | 4,281 | |||||
Net
cash (used in) provided by operating activities of continuing
operations
|
(3,763 | ) | 6,696 | |||||
Net
cash provided by operating activities of discontinued
operations
|
1,571 | 1,487 | ||||||
Net
cash (used in) provided by operating activities
|
(2,192 | ) | 8,183 | |||||
Cash flows from
investing activities:
|
||||||||
Capital
expenditures
|
(2,656 | ) | (3,151 | ) | ||||
Proceeds
from sale of fixed assets
|
241 | 644 | ||||||
Proceeds from net foreign investment hedges | 7,873 | – | ||||||
Purchase
of Bayou and Corrpro, net of cash acquired
|
(209,714 | ) | – | |||||
Net
cash used in investing activities of continuing operations
|
(204,256 | ) | (2,507 | ) | ||||
Net
cash provided by (used in) investing activities of discontinued
operations
|
750 | (5 | ) | |||||
Net
cash used in investing activities
|
(203,506 | ) | (2,512 | ) | ||||
Cash flows from
financing activities:
|
||||||||
Proceeds
from issuance of common stock
|
127,837 | – | ||||||
Proceeds
from notes payable
|
441 | – | ||||||
Principal
payments on notes payable
|
(938 | ) | (732 | ) | ||||
Net
proceeds from line of credit
|
7,500 | – | ||||||
Proceeds
from long-term debt
|
50,000 | – | ||||||
Net
cash provided by (used in) financing activities
|
184,840 | (732 | ) | |||||
Effect
of exchange rate changes on cash
|
(992 | ) | 4,883 | |||||
Net
increase (decrease) in cash and cash equivalents for the
period
|
(21,850 | ) | 9,822 | |||||
Cash
and cash equivalents, beginning of period
|
99,321 | 78,961 | ||||||
Cash
and cash equivalents, end of period
|
$ 77,471 | $ 88,783 | ||||||
1.
|
GENERAL
|
Combined
Financial
|
||||||||
Three
Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Revenue
|
$ 179,205 | $ 196,111 | ||||||
Net
income (loss)(1)
(2)
|
(19,018 | ) | 5,767 |
|
(1)
|
Includes
amortization of identified intangibles and depreciation of the excess of
fair value of acquired fixed assets over their pre-acquired recorded value
from purchase price
allocation.
|
|
(2)
|
Includes non-recurring
items related to $11.3 million of after-tax acquisition-related costs
incurred by Insituform, Bayou and Corrpro and $8.2 million of after-tax
expenses related to the mark-to-market of Corrpro warrants prior to the
acquisition, early termination fees and the write-off of deferred
financing fees related to previously outstanding Corrpro
debt.
|
Bayou
|
Corrpro
|
|||||||
Cash
and repayment of debt
|
$ 132,419 | $ 91,549 | ||||||
Issuance
of Insituform shares to Bayou’s noncontrolling interest
shareholders
|
2,500 | – | ||||||
Six-month
note payable to noncontrolling interest shareholders
|
1,500 | – | ||||||
Estimated
holdpack payments to Bayou shareholders
|
5,000 | – | ||||||
Total
consideration transferred
|
$ 141,419 | $ 91,549 |
Bayou
|
Corrpro
|
|||||||
Cash
|
$ 68 | $ 14,186 | ||||||
Receivables
and cost and estimated earnings in excess of billings
|
13,748 | 31,693 | ||||||
Inventory
|
3,394 | 11,843 | ||||||
Prepaid
expenses and other current assets
|
3,191 | 2,611 | ||||||
Property,
plant and equipment
|
50,877 | 10,507 | ||||||
Customer
relationships
|
24,060 | 27,100 | ||||||
Trademarks
|
5,320 | 4,900 | ||||||
Other
identifiable intangible assets
|
2,241 | 1,350 | ||||||
Investments
|
33,100 | – | ||||||
Other
assets
|
1,090 | 1,421 | ||||||
Accounts
payable, accrued expenses and billings in excess of cost and estimated
earnings
|
(8,003 | ) | (26,047 | ) | ||||
Other
long-term liabilities
|
(14,277 | ) | (17,525 | ) | ||||
Total identifiable net assets | $ 114,809 | $ 62,039 |
Total consideration transferred | $ 141,419 | $ 91,549 | ||||||
Less:
total identifiable net assets
|
114,809 | 62,039 | ||||||
Goodwill | $ 26,610 | $ 29,510 |
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2009
|
2008
|
|||||||
Weighted
average number of common shares used for basic EPS
|
32,987,397 | 27,470,623 | ||||||
Effect
of dilutive stock options and restricted stock
|
– | 463,346 | ||||||
Weighted
average number of common shares and dilutive potential common stock used
in
dilutive
EPS
|
32,987,397 | 27,933,969 |
As
of March 31, 2009
|
As
of December 31, 2008
|
|||||||||||||||||||||||||||
Weighted
Average
Useful
Lives (Years)
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
||||||||||||||||||||||
License
agreements
|
11 | $ 3,894 | $ (2,180 | ) | $ 1,714 | $ 3,894 | $ (2,139 | ) | $ 1,755 | |||||||||||||||||||
Contract
backlog
|
1 | 1,290 | (78 | ) | 1,212 | – | – | – | ||||||||||||||||||||
Leases
|
22 | 1,271 | (6 | ) | 1,265 | – | – | – | ||||||||||||||||||||
Trademarks
and tradenames
|
22 | 10,220 | (29 | ) | 10,191 | – | – | – | ||||||||||||||||||||
Non-compete
agreements
|
3 | 1,030 | (8 | ) | 1,022 | – | – | – | ||||||||||||||||||||
Customer
relationships
|
16 | 52,957 | (837 | ) | 52,120 | 1,797 | (633 | ) | 1,164 | |||||||||||||||||||
Patents
|
17 | 22,063 | (14,102 | ) | 7,961 | 21,431 | (13,997 | ) | 7,434 | |||||||||||||||||||
Total
|
$ 92,725 | $ (17,240 | ) | $ 75,485 | $ 27,122 | $ (16,769 | ) | $ 10,353 |
Estimated
amortization expense:
|
||||
For nine months ending December
31, 2009
|
$ 4,349 | |||
For year ending December 31,
2010
|
5,159 | |||
For year ending December 31,
2011
|
4,982 | |||
For year ending December 31,
2012
|
4,545 | |||
For year ending December 31,
2013
|
4,533 |
Stock
Awards
|
Weighted
Average
Award Date
Fair Value
|
|||||||
Outstanding
at January 1, 2009
|
475,787 | $ 14.25 | ||||||
Awarded
|
383,615 | 12.84 | ||||||
Shares
distributed
|
(21,608 | ) | 19.84 | |||||
Forfeited
|
(9,743 | ) | 14.44 | |||||
Outstanding
at March 31, 2009
|
828,051 | $ 13.45 |
Deferred
Stock
Units
|
Weighted
Average
Award Date
Fair Value
|
|||||||
Outstanding
at January 1, 2009
|
130,018 | $ 18.46 | ||||||
Awarded
|
– | – | ||||||
Shares
distributed
|
– | – | ||||||
Forfeited
|
– | – | ||||||
Outstanding
at March 31, 2009
|
130,018 | $ 18.46 |
Shares
|
Weighted
Average
Exercise
Price
|
|||||||
Outstanding
at January 1, 2009
|
1,032,773 | $ 19.18 | ||||||
Granted
|
322,036 | 12.84 | ||||||
Exercised
|
(750 | ) | 14.65 | |||||
Canceled/Expired
|
(14,740 | ) | 20.13 | |||||
Outstanding
at March 31, 2009
|
1,339,319 | 17.65 | ||||||
Exercisable
at March 31, 2009
|
723,783 | 21.10 |
For
the Three Months Ended March 31,
|
||||||||||||||||
2009
|
2008
|
|||||||||||||||
Range
|
Weighted
Average
|
Range
|
Weighted
Average
|
|||||||||||||
Volatility
|
50.1 | % | 50.1 | % | 37.3% – 41.9 | % | 37.9 | % | ||||||||
Expected
term (years)
|
7.0 | 7.0 | 5.0 | 5.0 | ||||||||||||
Dividend
yield
|
0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | ||||||||
Risk-free
rate
|
2.5 | % | 2.5 | % | 4.0 | % | 4.0 | % |
Documented
Remediation
Costs
|
Interest
|
Total
|
||||||||||
(in
thousands)
|
||||||||||||
Claim
recorded June 30, 2005
|
$ 5,872 | $ 275 | $ 6,147 | |||||||||
Adjustment
based on subsequent developments(1)
|
183 | – | 183 | |||||||||
Interest
recorded(2)
|
– | 1,738 | 1,738 | |||||||||
Claim
receivable balance, March 31, 2009
|
$ 6,055 | $ 2,013 | $ 8,068 |
|
(1)
|
During
the second quarter of 2006, the claim was adjusted up by $0.5 million, as
a result of documented remediation costs. During the second quarter of
2007, the claim was adjusted down by $0.3 million, as a result of
subsequent developments in the matter. Interest was adjusted
accordingly.
|
|
(2)
|
During the first quarter of 2009,
the Company recorded interest income of $0.1 million for post-judgment
interest. In the first quarter of 2008, the Company recorded $0.1 million
in pre-judgment interest. In total, the Company has recorded $1.6 million
in pre-judgment interest and $0.4 million in post-judgment
interest.
|
Weighted
|
|||||||||||||
Average
|
|||||||||||||
Remaining
|
Average
|
||||||||||||
Notional
|
Maturity
|
Exchange
|
|||||||||||
Position
|
Amount
|
in
Months
|
Rate
|
||||||||||
Euro
|
Sell
|
€ | 5,000,000 | 3.2 | 1.28 | ||||||||
Pound
Sterling
|
Sell
|
£ | 5,000,000 | 3.2 | 1.53 |
Weighted
|
|||||||||||||
Average
|
|||||||||||||
Remaining
|
Average
|
||||||||||||
Notional
|
Maturity
|
Exchange
|
|||||||||||
Position
|
Amount
|
in
Months
|
Rate
|
||||||||||
Canadian
Dollar
|
Sell
|
$ | 13,500,000 | 0.4 | 1.012 | ||||||||
Canadian
Dollar
|
Buy
|
$ | 10,500,000 | 0.2 | 1.294 | ||||||||
Euro
|
Sell
|
€ | 18,500,000 | 1.8 | 1.472 | ||||||||
Pound
Sterling
|
Buy
|
£ | 5,000,000 | 0.2 | 1.445 | ||||||||
Pound
Sterling
|
Sell
|
£ | 10,000,000 | 3.2 | 1.745 |
Three Months Ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Beginning
balance, January 1
|
$ 7,161 | $ (55 | ) | |||||
Expiration
of prior hedges included in cumulative
translation adjustment
|
(7,873 | ) | – | |||||
Gain
included in other comprehensive income
|
941 | 164 | ||||||
Ending
balance, March 31
|
$ 229 | $ 109 |
2009
|
2008
|
|||||||
Revenues
|
$ – | $ 5,608 | ||||||
Gross
profit (loss)
|
47 | (34 | ) | |||||
Operating
expenses
|
197 | 36 | ||||||
Operating
loss
|
(150 | ) | (70 | ) | ||||
Loss
before tax benefits
|
(150 | ) | (132 | ) | ||||
Tax
benefits
|
(52 | ) | (45 | ) | ||||
Net
loss
|
(98 | ) | (87 | ) |
March 31,
2009
|
December 31,
2008
|
|||||||
Receivables,
net
|
$ 642 | $ 2,235 | ||||||
Retainage
|
5,373 | 5,917 | ||||||
Claims
and costs and estimated earnings in excess of billings
|
5,104 | 5,104 | ||||||
Prepaid
expenses and other current assets
|
665 | 448 | ||||||
Property,
plant and equipment, less accumulated depreciation
|
2,506 | 3,256 | ||||||
Other
assets
|
2,520 | 2,587 | ||||||
Total
assets
|
$ 16,810 | $ 19,547 | ||||||
Current
liabilities
|
$ 1,329 | $ 1,541 | ||||||
Other
liabilities
|
887 | 818 | ||||||
Total
liabilities
|
$ 2,216 | $ 2,359 |
Three Months Ended
March 31,
|
||||||||
2009
|
2008
|
|||||||
Revenues:
|
||||||||
North
American Sewer Rehabilitation
|
$ 80,504 | $ 81,053 | ||||||
European
Sewer Rehabilitation
|
18,207 | 25,610 | ||||||
Asia-Pacific
Sewer Rehabilitation
|
5,746 | 1,539 | ||||||
Water
Rehabilitation
|
1,958 | 1,873 | ||||||
Energy
and Mining
|
21,597 | 15,852 | ||||||
Total
revenues
|
$ 128,012 | $ 125,927 | ||||||
Gross
profit (loss):
|
||||||||
North
American Sewer Rehabilitation
|
$ 18,450 | $ 16,390 | ||||||
European
Sewer Rehabilitation
|
4,498 | 4,720 | ||||||
Asia-Pacific
Sewer Rehabilitation
|
2,054 | 481 | ||||||
Water
Rehabilitation
|
(175 | ) | 61 | |||||
Energy
and Mining
|
5,846 | 5,234 | ||||||
Total
gross profit
|
$ 30,673 | $ 26,886 | ||||||
Operating
income (loss):
|
||||||||
North
American Sewer Rehabilitation
|
$ 5,821 | $ 1,241 | ||||||
European
Sewer Rehabilitation
|
(143 | ) | (935 | ) | ||||
Asia-Pacific
Sewer Rehabilitation
|
1,262 | 165 | ||||||
Water
Rehabilitation
|
(1,230 | ) | (601 | ) | ||||
Energy
and Mining(1)
(2)
|
(5,631 | ) | 3,385 | |||||
Total
operating income
|
$ 79 | $ 3,255 |
(1)
|
$8.2
million of acquisition and severance costs were included in the operating
loss of the Energy and Mining segment for the three months ended March 31,
2009.
|
(2)
|
Bayou
contributed $0.3 million of operating income to this segment in the first
quarter of 2009 during the 39-day period following its acquisition by the
Company on February 20, 2009.
|
Three Months Ended
March 31,
|
||||||||
2009
|
2008
|
|||||||
Revenues:
|
||||||||
United
States
|
$ 87,065 | $ 78,634 | ||||||
Canada
|
11,718 | 12,204 | ||||||
Europe
|
18,224 | 26,542 | ||||||
Other
foreign
|
11,005 | 8,547 | ||||||
Total
revenues
|
$ 128,012 | $ 125,927 | ||||||
Gross
profit:
|
||||||||
United
States
|
$ 19,601 | $ 15,983 | ||||||
Canada
|
3,213 | 3,922 | ||||||
Europe
|
4,371 | 4,784 | ||||||
Other
foreign
|
3,488 | 2,197 | ||||||
Total
gross profit
|
$ 30,673 | $ 26,886 | ||||||
Operating
income (loss):
|
||||||||
United
States (1)
|
$ (3,638 | ) | $ 1,250 | |||||
Canada
|
2,281 | 2,190 | ||||||
Europe
|
(522 | ) | (1,571 | ) | ||||
Other
foreign
|
1,958 | 1,386 | ||||||
Total
operating income
|
$ 79 | $ 3,255 |
$8.2
million of acquisition and severance costs were included in the operating
loss of the United States region for the three months ended March 31,
2009.
|
Three Months Ended March 31,
|
||||||||||||||||
2009
|
2008
|
$ Change
|
% Change
|
|||||||||||||
Revenues
|
$ 128,012 | $ 125,927 | $ 2,085 | 1.7 | % | |||||||||||
Gross
profit
|
30,673 | 26,886 | 3,787 | 14.1 | ||||||||||||
Gross
margin
|
24.0 | % | 21.4 | % | 2.6 | % | ||||||||||
Operating
expenses
|
30,594 | 23,631 | (6,963 | ) | (29.5 | ) | ||||||||||
Operating
income
|
79 | 3,255 | (3,176 | ) | (97.8 | ) | ||||||||||
Operating
margin
|
0.1 | % | 2.6 | % | (2.5 | )% | ||||||||||
Income
(loss) from continuing operations
|
(1,107 | ) | 2,030 | (3,137 | ) | (154.5 | ) |
Three Months Ended March 31,
|
||||||||||||||||
2009
|
2008
|
$ Change
|
% Change
|
|||||||||||||
Revenues
|
$ 80,504 | $ 81,053 | $ (549 | ) | (0.7 | )% | ||||||||||
Gross
profit
|
18,450 | 16,390 | 2,060 | 12.6 | ||||||||||||
Gross
margin
|
22.9 | % | 20.2 | % | 2.7 | % | ||||||||||
Operating
expenses
|
12,629 | 15,149 | (2,520 | ) | (16.6 | ) | ||||||||||
Operating
income
|
5,821 | 1,241 | 4,580 | 369.1 | ||||||||||||
Operating
margin
|
7.2 | % | 1.5 | % | 5.7 | % |
Three Months Ended March 31,
|
||||||||||||||||
2009
|
2008
|
$ Change
|
% Change
|
|||||||||||||
Revenues
|
$ 18,207 | $ 25,610 | $ (7,403 | ) | (28.9 | )% | ||||||||||
Gross
profit
|
4,498 | 4,720 | (222 | ) | (4.7 | ) | ||||||||||
Gross
margin
|
24.7 | % | 18.4 | % | 6.3 | % | ||||||||||
Operating
expenses
|
4,641 | 5,655 | (1,014 | ) | (17.9 | ) | ||||||||||
Operating
income (loss)
|
(143 | ) | (935 | ) | 792 | (84.7 | ) | |||||||||
Operating
margin
|
(0.8 | )% | (3.7 | )% | 2.9 | % |
Three Months Ended March 31,
|
||||||||||||||||
2009
|
2008
|
$ Change
|
% Change
|
|||||||||||||
Revenues
|
$ 5,746 | $ 1,539 | $ 4,207 | 273.4 | % | |||||||||||
Gross
profit
|
2,054 | 481 | 1,573 | 327.0 | ||||||||||||
Gross
margin
|
35.7 | % | 31.3 | % | 4.4 | % | ||||||||||
Operating
expenses
|
792 | 316 | 476 | 150.6 | ||||||||||||
Operating
income
|
1,262 | 165 | 1,097 | 664.8 | ||||||||||||
Operating
margin
|
22.0 | % | 10.7 | % | 11.3 | % |
Three Months Ended March 31,
|
||||||||||||||||
2009
|
2008
|
$ Change
|
% Change
|
|||||||||||||
Revenues
|
$ 1,958 | $ 1,873 | $ 85 | 4.5 | % | |||||||||||
Gross
profit (loss)
|
(175 | ) | 61 | (236 | ) | (386.9 | ) | |||||||||
Gross
margin
|
(8.9 | )% | 3.3 | % | (12.2 | )% | ||||||||||
Operating
expenses
|
1,055 | 662 | 393 | 59.4 | ||||||||||||
Operating
loss
|
(1,230 | ) | (601 | ) | (629 | ) | 104.7 | |||||||||
Operating
margin
|
(62.8 | )% | (32.1 | )% | (30.7 | )% |
Three Months Ended March 31,
|
||||||||||||||||
2009
|
2008
|
$ Change
|
% Change
|
|||||||||||||
Revenues
|
$ 21,597 | $ 15,852 | $ 5,745 | 36.2 | % | |||||||||||
Gross
profit
|
5,846 | 5,234 | 612 | 11.7 | ||||||||||||
Gross
margin
|
27.1 | % | 33.0 | % | (5.9 | )% | ||||||||||
Acquisition-related
costs
|
8,219 | – | 8,219 | 100.0 | ||||||||||||
Operating
expenses
|
3,256 | 1,849 | 1,407 | (76.1 | ) | |||||||||||
Operating
income (loss)
|
(5,631 | ) | 3,385 | (9,016 | ) | (266.4 | ) | |||||||||
Operating
margin
|
(26.1 | )% | 21.4 | % | (47.5 | )% |
Backlog
|
March 31,
2009
|
December 31,
2008
|
September 30,
2008
|
June 30,
2008
|
March 31,
2008
|
|||||||||||||||
(in
millions)
|
||||||||||||||||||||
North
American Sewer Rehabilitation
|
$ 160.4 | $ 150.8 | $ 178.5 | $ 185.4 | $ 174.2 | |||||||||||||||
European
Sewer Rehabilitation
|
26.1 | 25.2 | 30.7 | 34.9 | 39.0 | |||||||||||||||
Asia-Pacific
Sewer Rehabilitation
|
40.1 | 46.2 | 53.6 | 33.2 | 34.4 | |||||||||||||||
Water
Rehabilitation
|
8.9 | 8.2 | 6.7 | 11.6 | 5.8 | |||||||||||||||
Energy
and Mining (1)
|
153.2 | 18.7 | 23.4 | 24.7 | 32.2 | |||||||||||||||
Total
|
$ 388.7 | $ 249.1 | $ 292.9 | $ 289.8 | $ 285.6 |
|
(1)
Contract backlog for our Energy and Mining segment at March 31, 2009
includes backlog of our newly acquired Bayou and Corrpro businesses of
$76.7 million and $62.2 million,
respectively.
|
March 31,
2009
|
December 31,
2008
|
|||||||
(in
thousands)
|
||||||||
Cash
and cash equivalents
|
$ 77,471 | $ 99,321 | ||||||
Restricted
cash
|
1,378 | 1,829 |
Payments
Due by Period
|
||||||||||||||||||||||||||||
Cash
Obligations(1)(2)(3)(4)
|
Total
|
2009
|
2010
|
2011
|
2012
|
2013
|
Thereafter
|
|||||||||||||||||||||
Long-term
debt
|
115,000 | 7,500 | 10,000 | 10,000 | 22,500 | 65,000 | - | |||||||||||||||||||||
Line
of credit facility
|
7,500 | 7,500 | - | - | - | - | - | |||||||||||||||||||||
Interest
on long-term debt
|
20,973 | 4,903 | 4,758 | 4,613 | 4,574 | 2,125 | - | |||||||||||||||||||||
Operating
leases
|
39,912 | 11,732 | 10,948 | 6,905 | 4,104 | 2,844 | 3,379 | |||||||||||||||||||||
Total
contractual cash obligations
|
183,385 | 31,635 | 25,706 | 21,518 | 31,178 | 69,969 | 3,379 |
(1)
|
Cash
obligations are not discounted. See Notes 5 and 7 to the consolidated
financial statements contained in this report regarding our long-term debt
and credit facility and commitments and contingencies,
respectively.
|
(2)
|
Resin
supply contracts are excluded from this table. See “Commodity Risk” under
Part I, Item 3 of this report for further
discussion.
|
(3)
|
As
of March 31, 2009, we had borrowed the entire amount of the $50.0 million
term loan and $7.5 million of our revolving line of credit under our
$115.0 million credit facility in connection with our acquisition of
Corrpro Companies, Inc.on March 31, 2009. We also had $18.2 million for
non-interest bearing letters of credit outstanding as of March 31, 2009,
$14.5 million of which was collateral for insurance and $3.7 million of
which was collateral for work
performance.
|
(4)
|
Liabilities
related to FASB Interpretation No. 48, Accounting for Uncertainty in
Income Taxes, an Interpretation of FASB Statement No. 109, have not
been included in the table above because we are uncertain as to if or when
such amounts may be settled.
|
|
·
|
significant
underperformance of a segment relative to expected, historical or
projected future operating results;
|
|
·
|
significant
negative industry or economic
trends;
|
|
·
|
significant
changes in the strategy for a segment including extended slowdowns in the
sewer rehabilitation market; and
|
|
·
|
a
decrease in our market capitalization below our book value for an extended
period of time.
|
North
American Sewer Rehabilitation
|
$ 102.3 | |||
European
Sewer Rehabilitation
|
19.7 | |||
Energy
and Mining
|
57.1 | |||
Total
Goodwill
|
$ 179.1 |
|
1.
|
The
following six directors were elected, each to serve a one-year term or
until his or her successor has been elected and qualified. The vote was as
follows:
|
Name
|
For
|
Against
|
Abstain
|
Broker
Non-Vote
|
||||||||||||
J.
Joseph Burgess
|
30,756,722 | 941,057 | 43,118 | 2,231 | ||||||||||||
Stephen
P. Cortinovis
|
28,266,956 | 3,423,259 | 50,682 | 2,231 | ||||||||||||
Stephanie
A. Cuskley
|
28,471,945 | 3,226,822 | 42,130 | 2,231 | ||||||||||||
John
P. Dubinsky
|
27,487,889 | 4,203,872 | 49,134 | 2,233 | ||||||||||||
Juanita
H. Hinshaw
|
28,087,957 | 3,611,188 | 41,754 | 2,229 | ||||||||||||
Alfred
L. Woods
|
28,254,365 | 3,447,465 | 39,070 | 2,228 |
2.
|
The
Insituform Technologies, Inc. 2009 Employee Equity Incentive Plan was
approved. The vote was as follows:
|
For
|
Against
|
Abstain
|
Broker Non-Vote
|
20,828,532
|
3,632,336
|
30,211
|
7,252,049
|
3.
|
The
appointment of PricewaterhouseCoopers LLP as independent auditors for the
fiscal year ending December 31, 2009
was ratified. The vote was as
follows:
|
For
|
Against
|
Abstain
|
Broker Non-Vote
|
31,511,730
|
145,657
|
83,511
|
2,230
|
INSITUFORM
TECHNOLOGIES, INC.
|
|
|
|
Date:
May 7, 2009
|
/s/ David A. Martin
|
Senior
Vice President and Chief Financial Officer
(Principal
Financial Officer)
|
31.1
|
Certification
of J. Joseph Burgess pursuant to Section 302 of the Sarbanes-Oxley Act of
2002, filed herewith.
|
31.2
|
Certification
of David A. Martin pursuant to Section 302 of the Sarbanes-Oxley Act of
2002, filed herewith.
|
32.1
|
Certification
of J. Joseph Burgess pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith.
|
32.2
|
Certification
of David A. Martin pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith.
|