Aegion Corporation Provides Update on Strategic Actions and Other Third-Quarter Activities
October 02 2017 - 6:00PM
Aegion Corporation (Nasdaq Global Select Market:AEGN) today
provided an update to the previously announced strategic actions
and restructuring plan as well as related impacts to the
third-quarter and full-year 2017 results.
The Company announced on August 1, 2017 a series of strategic
actions to generate more predictable and sustainable long-term
earnings growth. This announcement included:
- A plan to divest the Corrosion Protection platform’s pipe
coating and insulation business in Louisiana
- The exit of the Infrastructure Solutions platform’s North
America activity for non-pressure pipe contract applications of the
Tyfo® Fibrwrap® system
- The restructuring of the Corrosion Protection platform’s
operations in Canada
- The implementation of cost reduction initiatives across the
Company
As part of the repositioning of the Infrastructure Solutions
platform’s Tyfo® Fibrwrap® system operations in North America, the
Company performed an impairment assessment of the long-lived assets
and goodwill for the Fyfe reporting unit. As a result, the Company
will incur a non-cash, pre-tax impairment charge of approximately
$85 million for long-lived intangibles and goodwill in the third
quarter of 2017.
During the third quarter of 2017, the Company also completed a
detailed assessment of the Infrastructure Solutions businesses in
Australia and Denmark that resulted in a restructuring program in
both countries. Annual savings are expected to be between $2 and $3
million in Australia and Denmark, with cash restructuring costs of
$3 to $4 million. Total annual savings from all restructuring
activities and other cost reduction initiatives are estimated to be
in excess of $17 million and expected to be fully realized in 2018.
Approximately $3 million of annual savings are also anticipated to
be realized from the reduction in annual amortization of
intangibles. Total cash costs associated with the restructuring
actions are estimated to be $12 to $15 million.
The strong order momentum achieved by Aegion in the first half
of the year continued across all three platforms in the third
quarter despite the challenges from Hurricanes Harvey and Irma in
two key markets. The Company continued to have performance issues
in the portions of the business subject to restructuring actions,
which combined with the impact on operations from the hurricanes
are expected to impact third-quarter operating results by
approximately $5 million, or $0.10 per diluted share.
Charles R. Gordon, Aegion’s President and CEO, commented, “I am
pleased that actions we announced in August are on pace with our
expectations to be substantially completed during 2017. It will be
difficult to recover in the fourth quarter from the impact of the
recent hurricanes and the financial challenges experienced in the
third quarter in Denmark, Australia and Fyfe North America. We
expect the results of our restructuring actions combined with the
momentum in key markets will provide a solid foundation for Aegion
to achieve much stronger results in 2018.”
About Aegion (NASDAQ:AEGN)
About Aegion Corporation (NASDAQ:AEGN)Aegion
combines innovative technologies with market leading expertise to
maintain, rehabilitate, and strengthen infrastructure around the
world. Since 1971, the company has played a pioneering role in
finding innovative solutions to rehabilitate aging infrastructure,
primarily pipelines in the wastewater, water, energy, mining and
refining industries. Aegion also maintains the efficient operation
of refineries and other industrial facilities. Aegion is committed
to Stronger. Safer. Infrastructure®. More information about Aegion
can be found at www.aegion.com.
Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a
“safe harbor” for forward-looking statements. Aegion’s
forward-looking statements in this news release represent its
beliefs or expectations about future events or financial
performance. These forward-looking statements are based on
information currently available to Aegion and on management’s
beliefs, assumptions, estimates or projections and are not
guarantees of future events or results. When used in this document,
the words “anticipate,” “estimate,” “believe,” “plan,” “intend,
“may,” “will” and similar expressions are intended to identify
forward-looking statements, but are not the exclusive means of
identifying such statements. Such statements are subject to known
and unknown risks, uncertainties and assumptions, including those
referred to in the “Risk Factors” section of Aegion’s Annual Report
on Form 10-K for the year ended December 31, 2016, as filed with
the Securities and Exchange Commission on March 1, 2017, and in
subsequently filed documents. In light of these risks,
uncertainties and assumptions, the forward-looking events may not
occur. In addition, Aegion’s actual results may vary materially
from those anticipated, estimated, suggested or projected. Except
as required by law, Aegion does not assume a duty to update
forward-looking statements, whether as a result of new information,
future events or otherwise. Investors should, however, review
additional disclosures made by Aegion from time to time in Aegion’s
filings with the Securities and Exchange Commission. Please use
caution and do not place reliance on forward-looking statements.
All forward-looking statements made by Aegion in this news release
are qualified by these cautionary statements.
Aegion®, Tyfo® and Fibrwrap® the associated logo are the
registered trademarks of Aegion Corporation and its
affiliates.(AEGN-ER)
CONTACT: |
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Aegion Corporation |
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David A. Martin,
Executive Vice President and Chief Financial Officer |
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(636) 530-8000 |
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