Aegion's Contract Winning Spree Continues, Wins $6.9M Deal
Zacks Investment Research | Oct 09, 2019 09:52PM ET
Aegion Corporation’s (NASDAQ:AEGN) subsidiary — Insituform Technologies, LLC — has inked a $6.9-million contract to rehabilitate more than 26 miles of 8-36 inche diameter wastewater pipelines in Miami-Dade County in Florida. The company will carry out the rehabilitation with cured-in-place pipe (CIPP) technology. The work is scheduled to begin in late 2019 and is expected to be completed within the two-year period. The contract also includes an option for additional two-year renewal.
Aegion provides solutions to rehabilitate, maintain and strengthen infrastructure across the world. Since 1971, the company has been providing trenchless solutions, particularly in residential areas. It replaces the conventional dig-and-replace method with the help of CIPP technology.
Aegion’s Contract Winnings Spree Continues
In September, the company inked a $15.7-million deal to rehabilitate more than 22 miles of small, medium and large-diameter wastewater pipelines in Georgia. It also inked a $9.1-million deal to renovate Michigan’s wastewater pipelines that are approximately 11,000 feet and 30-72 inch in diameter.
Aegion’s Infrastructure Solutions, which contributed 48.8% to second-quarter 2019 revenues, has completed several large wastewater pipeline projects. The company has held the annual contract for CIPP in Miami-Dade for the past four years and has completed a majority of its installation work in the area for the past five years.
Infrastructure Solutions business — the largest contributor to Aegion’s top line — registered solid margin expansion in the last reported quarter. The upside can be attributed to solid growth in the North America CIPP business and the exit of underperforming international CIPP operations. Notably, the segment’s adjusted gross and operating margins increased 260 basis points (bps) and 310 bps, respectively, during the second quarter 2019.
Notably, for the Infrastructure Solutions business, Aegion predicts 2019 revenue growth in the range of 2-4% after adjusting for the effect of exited or to-be-exited operations. The upside will be supported by improvements in crew productivity and project mix within North America CIPP.
Notably, Aegion’s shares have gained 5.5% in the past six months compared with the Zacks Investment Research
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