Strong Q2’19 results exceeded expectations; Reaffirming 2019 guidance and targeting further growth in 2020
- Q2’19 loss per diluted share was $0.27 compared to earnings per diluted share of $0.24 in Q2’18. Q2’19 adjusted (non-GAAP)1 earnings per diluted share were $0.37, increasing 9% compared to $0.34 in Q2’18.
- Revenues for Q2’19 were $319 million. Excluding exited or to be exited operations, revenues on a same-store basis declined 2%, primarily driven by the expected reduction in large coating project contributions at Corrosion Protection.
- Adjusted gross margins increased to 21.3%, led by continued productivity improvements in North American CIPP operations and the exit of underperforming international CIPP businesses within Infrastructure Solutions, which overcame the impact of lost contributions from the high-margin coating projects within Corrosion Protection.
- Adjusted operating margins grew 50 basis points to 5.9%, driven by a $4 million, or 7%, decline in adjusted operating expenses as a result of restructuring and cost containment efforts.
1 Adjusted (non-GAAP) results exclude certain charges related to the Company’s restructuring activities, acquisition and divestiture-related activities, impairment of assets held for sale, credit facility amendment fees and impacts from the Tax Cuts and Jobs Act. Reconciliation of adjusted results is included below.
Q2’19 HIGHLIGHTS by Charles R. Gordon, President and Chief Executive Officer
Infrastructure Solutions delivered its highest quarterly gross margins in three years at 25.0%, driven by sharp improvements in North America and the exit of underperforming international CIPP operations.
Corrosion Protection delivered adjusted gross margins of 22.1%, with strength in industrial lining activities helping to offset the impact of lost contributions from the large coating projects completed in the prior year. The North America cathodic protection business implemented multiple cost reduction initiatives that will yield more than $6 million in annualized savings over the next 12 months.
Energy Services increased adjusted operating income 65% on strong top-line growth in core maintenance activities and improved operating leverage.
Year-to-date operating cash flows of $14 million grew 38% compared to the prior year.
“Aegion’s second quarter adjusted results exceeded expectations, bolstered by strong performance from Infrastructure Solutions and Energy Services.
We are now substantially complete with the multi-year restructuring activities to simplify, de-risk and improve profitability at Aegion. I am excited to move forward with a clear focus on leveraging our market-leading North America positions, differentiating through technology investments and capturing multiple growth opportunities within all core segments.
We are well positioned with solid backlog and operating momentum going into 2H’19. We are reaffirming our guidance for modest growth in adjusted EPS in 2019 compared to the prior year and see a strong sales funnel going into 2020 which should drive significant earnings expansion next year.”
WARNING: This is NOT the complete report.