Aegion Corporation, Successor to Insituform Technologies, Inc., Reports Third Quarter 2011 Results:

• Third quarter net income, excluding impacts of one-time acquisition-related transaction expenses, restructuring charges and expenses related to redemption of prior debt, was $10.8 million, or $0.27 per diluted share (non-GAAP), in line with revised expectations
• Third quarter net income was $1.2 million, or $0.03 per diluted share, inclusive of $6.8 million in pre-tax expense related to the redemption of our prior debt, $5.4 million in pre-tax expense related to recent acquisitions and $2.2 million in pre-tax expense related to restructuring activities that took place during the third quarter
• Consolidated contract backlog at September 30, 2011 reached a level of $457.2 million, representing an 11.5 percent and 11.9 percent increase from June 30, 2011 and December 31, 2010, respectively. Energy and Mining contract backlog increased 34.2 percent due to growth at CRTS and Bayou
• Full-year range of earnings expectation confirmed at $0.90 to $1.00 per diluted share (non-GAAP), excluding impacts of one-time acquisition-related transaction expenses, prior debt redemption costs and restructuring charges

ST. LOUIS–(BUSINESS WIRE)–Aegion Corporation (Nasdaq Global Select Market: AEGN) today reported third quarter net income, excluding impacts of one-time acquisition-related transaction expenses, prior debt redemption costs and restructuring chargesof $10.8 million ($0.27 per diluted share) (non-GAAP), compared to income from continuing operations of $18.8 million ($0.48 per diluted share) in the third quarter of 2010. Inclusive of approximately $6.8 million in pre-tax debt redemption costs, $5.4 million in pre-tax acquisition-related expenses, and $2.2 million in pre-tax restructuring charges, net income for the third quarter of 2011 was $1.2 million, or $0.03 per diluted share. For the first nine months of 2011, income from continuing operations, exclusive of acquisition-related expenses, prior debt redemption costs and restructuring charges, was $21.7 million (non-GAAP), or $0.55 per diluted share, compared to $43.0 million, or $1.10 per diluted share, in the first nine months of 2010. Inclusive of the acquisition-related expenses, prior debt redemption costs and restructuring charges, net income for the first nine months of 2011 was $11.8 million, or $0.30 per diluted share.

“I am pleased with the results we achieved in our European Sewer and Water Rehabilitation business as all regions reported revenue growth in the quarter”

Joe Burgess, President and Chief Executive Officer, commented, “We achieved our recent guidance for the third quarter and also are beginning to see tangible results from our efforts to stabilize and reposition our North American Sewer and Water Rehabilitation business as September and October to date showed much improved financial results. With this stabilization and continued strong performance expected this year from United Pipeline Systems and Corrpro, we reaffirm guidance to deliver non-GAAP earnings per share in the range of $0.90-$1.00, which translates to $0.35 to $0.45 per diluted share (non-GAAP) in the fourth quarter. And as we begin to focus on 2012, I believe 2011 will become an inflection point, as we continue to establish new growth platforms beyond sewer rehabilitation, creating a new company, Aegion Corporation, that can consistently deliver, on average, 15 percent annual earnings growth.“

“We implemented a $2.2 million restructuring program in the third quarter to restructure our North American Sewer and Water Rehabilitation business and streamline costs in our other segments and corporate support functions. We anticipate that the restructuring will generate approximate pre-tax savings of $1.8 – $2.0 million in the fourth quarter of 2011 and annualized pre-tax savings of $8.0 – $9.0 million in 2012. We’ve taken the necessary steps to reposition our North American Sewer and Water Rehabilitation business to successfully operate in the current challenging market environment where small diameter pipe work is exceeding 85 percent of our project mix, the average transaction amount is considerably smaller and we are executing a record level of these smaller transactions,” said Burgess. “Those actions included a reduction in crews, as well as direct and corporate overhead, implementation of a more disciplined bidding process and investment in project management and logistics to improve efficiency. We achieved increased profitability in the third quarter, primarily as a result of a strong September, compared to previous quarters this year and I expect we will build momentum of profitable growth in the coming quarters.”

With regards to our Energy and Mining segment, Burgess stated, “Our coatings businesses were impacted by not winning a large Canadian insulation lining contract and delay in pipe delivery for a large pipe lining project at our New Iberia facility during the third quarter. This obviously impacted the Energy and Mining segment’s financial results at the gross profit and operating profit lines, overshadowing record results from United Pipeline Systems and continued steady performance from Corrpro. The outlook for our Energy and Mining segment is promising as our backlog of pipe coating projects is improving because of a return of off shore projects in the Gulf of Mexico and due to our efforts to expand our Energy and Mining group’s footprint in the Middle East and North Africa. We already have $20 million in backlog in our pipe coating business and there is a clear line of site for an additional $20 million in the coming months. We closed the quarter with record backlog for the entire segment, and our pace of project acquisitions is increasing. Of course, we also recently announced the largest project in United Pipeline Systems’ history with a $67.3 million joint venture project in Morocco.”

“I am pleased with the results we achieved in our European Sewer and Water Rehabilitation business as all regions reported revenue growth in the quarter,” Burgess continued. “This was especially true in the U.K., a promising sign for a market that experienced challenging conditions over the last several years. While market conditions remain challenging in many parts of Europe, we continue to make positive changes to our operating structure to ensure we move forward on profitable improvements and return on capital. We continue to face headwinds in our Asia-Pacific region, primarily in our India market, as we experienced continued delays in closing out existing projects and in the award of two new projects in Delhi valued at approximately $16 million. The same can be said for Singapore where the pace of activity has slowed over the short-term, but I expect new project work to commence there over the next few months and in Malaysia where we have significant upcoming bids. Australia, on the other hand, remains a strong market as we tap into additional opportunities not only in Sydney but in other cities, including Melbourne and Brisbane.”

“As we near the end of 2011, our attention quickly turns to the growth outlook for the new Aegion Corporation. This announcement formalizes for our stockholders and customers the evolution of Insituform into a larger and broader company focused on the preservation of infrastructure assets in key segments and markets around the world. The acquisitions we made this year have grown our Energy and Mining product and service offering and established our Commercial and Structural group. Both provide Aegion with true platforms for growth in attractive high return segments of the infrastructure market. I am very optimistic about the outlook for these segments, especially with what the fiber-reinforced polymer composite system innovation can bring to the reinforcement of commercial structures, opening a new, high growth, market for Aegion.”

“And that growth outlook begins in 2012 as I see the pieces coming together for a very strong year. We have implemented important stabilizing improvements to our North American Sewer and Water Rehabilitation business in recent months, and we are experiencing very robust market conditions throughout our key growth segments of Energy and Mining and Commercial and Structural. I am confident that 2011 will be viewed as a transition year towards a stronger and more consistently profitable Company going forward.”

Segment Reporting

Prior to the third quarter of 2011, we previously considered Water Rehabilitation to be a separate reportable segment. Based on an internal management reorganization, we have combined previously reported water rehabilitation results for all periods presented below, which have not been material, with the geographically separated sewer rehabilitation segments. Additionally, in connection with our recent acquisition of the North American operations of Fyfe Group, LLC, we established a Commercial and Structural reportable segment.

In the third quarter of 2011, our Energy and Mining segment operating income decreased by $6.3 million, or 46.9 percent, compared to the third quarter of 2010, inclusive of $3.1 million of pre-tax acquisition-related expenses and restructuring charges. The decrease was primarily due to a lack of large diameter pipe coating projects partially offset by another strong quarter from our industrial linings and cathodic protection businesses. Energy and Mining gross margin declined to 24.0 percent compared to 28.8 percent in the third quarter of 2010 as much of the revenue growth came from geographic regions with lower gross profit margins coupled with lower margins resulting from a lack of large coating projects. The increase in operating expenses was attributable to higher corporate allocations due to the increased size of this segment, acquisition-related depreciation and amortization related to the CRTS and Hockway acquisitions and increased resources to support the growth of the segment, primarily for increased support of international projects and the addition of recent acquisitions. We expect strong global energy markets will lead to growth within existing geographies as well as new geographies, specifically in Asia, the Middle East and North Africa as evidenced by the recent acquisitions within our corrosion engineering and pipe coating businesses, which expand our presence in the Middle East and other key markets. During the third quarter of 2011, CRTS and Hockway both experienced a slight loss due to acquisition-related depreciation and amortization; however, we expect these acquisitions to contribute positive operating income in the coming quarters.

Similar to 2010, the third quarter of 2011 includes a $1.7 million pre-tax reversal of an earnout liability that was not earned by the former owners of Bayou.

Contract backlog in our Energy and Mining segment at September 30, 2011 was $225.6 million, an increase of $57.5 million, or 34.2 percent, compared to June 30, 2011 and an increase of $69.3 million, or 44.3 percent, compared to September 30, 2010. The increase over the previous quarter was primarily driven by an increase at CRTS, which added a $48.4 million contract during the quarter for work to be performed in Saudi Arabia over the next three years. Additionally, our pipe coating operations backlog increased due to a recovery of offshore pipeline development activity. Since December 31, 2010, our pipe coating and cathodic protection operations have increased backlog levels. We continue to believe that high commodity prices as a result of healthy global energy demand will result in significant continued opportunities for our Energy and Mining segment for future periods, particularly as it relates to new spending in the sector. We expect backlog for this segment to grow through the final quarter of 2011 and into 2012, particularly with the addition of the $67.3 million project in Morocco awarded to our United Pipeline System joint venture in October 2011.

In the third quarter of 2011, our North American Sewer and Water Rehabilitation segment operating income decreased by $7.5 million, or 63.1 percent, compared to the third quarter of 2010. The principal contributors to the 2011 third quarter results were the 14.7 percent decline in revenues and compressed gross margins resulting from project execution challenges, magnified by project release delays impacting crew utilization. In addition, there was a significant shift to lower margin small diameter project, pressuring project management and crew operations, which further negatively impacted performance. Contracting margins for the eastern and western regions improved from the second quarter of 2011 as we began to see the effects of our efforts to improve our project management organizational structure.

Contract backlog in our North American Sewer and Water Rehabilitation segment at September 30, 2011 was $157.5 million, a decrease of $12.0 million, or 7.1 percent, compared to June 30, 2011 and a decrease of $33.5 million, or 17.5 percent, compared to September 30, 2010. The decrease from June 30, 2011 was due to timing of project awards in the eastern and central regions of the United States. There was an increase in the amount of projects won but not signed from the second quarter to third quarter of 2011. Contract backlog in the western region of the United States increased from June 30, 2011 as a result of a number of large projects being signed during the third quarter. Market conditions remain challenging although our recent project awards and market share have been holding up against historical performance and margins in backlog are improving.

In the third quarter of 2011, our European Sewer and Water Rehabilitation segment operating income increased by $0.6 million compared to the third quarter of 2010, exclusive of $0.7 million of pre-tax restructuring charges. The increase was primarily due to improved project performance in France and improved market conditions in the United Kingdom partially offset by lower margin projects in the Netherlands and competitive pricing pressures in Switzerland.

Contract backlog in our European Sewer and Water Rehabilitation segment at September 30, 2011 decreased $3.0 million, or 13.5 percent, compared to June 30, 2011 and decreased $6.8 million, or 26.2 percent, compared to September 30, 2010. Backlog has improved in France, while market conditions and increased competition have negatively impacted backlog in the Netherlands.

In the third quarter of 2011, our Asia-Pacific Sewer and Water Rehabilitation segment operating income decreased by $0.6 million, compared to the third quarter of 2010. The decrease was primarily due to the lack of profitable projects in India, partially offset by continued growth in our Australian operation. Operating expenses decreased by $0.3 million for the quarter compared to the prior year; however, operating income was also negatively impacted by $0.2 million as part of the Company’s restructuring efforts.

Contract backlog in our Asia-Pacific Sewer and Water Rehabilitation segment at September 30, 2011 was $37.4 million, a decrease of $12.9 million, or 25.6 percent, compared to June 30, 2011 and a decrease of $43.9 million, or 54.0 percent, compared to September 30, 2010. The decrease was primarily due to efforts to work through backlog in Australia, Hong Kong and Singapore as well as the lack of any large new project awards during the quarter. In the second quarter of 2011, our Singapore projects were adjusted downward due to project revisions. Prospects continue to be strong throughout Asia-Pacific for expansion of the business, particularly in Australia and Malaysia, while our recent large bids in India continue to be delayed by the customer.

The third quarter of 2011 represents financial results for the 30-day period ended September 30, 2011 following our acquisition of the North American operation of Fyfe Group LLC on August 31, 2011. During the third quarter of 2011, we incurred $3.1 million of pre-tax acquisition-related costs for this segment. We hold exclusive negotiating rights to acquire Fyfe Group’s international operations in Latin America, Asia and Europe, which we anticipate would close over the next several quarters. Backlog at September 30, 2011 for the Commercial and Structural segment was $17.5 million. Excluding acquisition-related expenses, the Commercial and Structural segment generated a slight operating profit in the third quarter and we anticipate stronger performance in the fourth quarter and beyond with solid backlog levels and improving prospects in a variety of end markets.

Cash Flow

Unrestricted cash at September 30, 2011 was $96.7 million compared to $108.0 million at June 30, 2011 and $114.8 million at December 31, 2010. Operating cash flow for the first nine months was impacted primarily by transaction costs related to recent acquisitions, along with the restructuring charges, prior debt redemption costs and lower earnings from North American Sewer and Water Rehabilitation. We expect to see increased cash flow during the remainder of 2011 as earnings grow and we are able to optimize our cash management practices.

Aegion is a global leader in infrastructure protection, providing proprietary technologies and services to protect against the corrosion of industrial pipelines and for the rehabilitation and strengthening of sewer, water, energy and mining piping systems and buildings, bridges, tunnels and waterfront structures. More information about Aegion can be found on its internet site at www.aegion.com.

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. We make forward-looking statements in this news release that represent our beliefs or expectations about future events or financial performance. These forward-looking statements are based on information currently available to us 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 our Annual Report on Form 10-K for the year ended December 31, 2010, as filed with the Securities and Exchange Commission on February 28, 2011 under the name of Insituform Technologies, Inc. In light of these risks, uncertainties and assumptions, the forward-looking events may not occur. In addition, our actual results may vary materially from those anticipated, estimated, suggested or projected. Except as required by law, we do 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 us from time to time in our periodic 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 us in this news release are qualified by these cautionary statements.

Regulation G Statement

Aegion has presented certain information in this release excluding certain items that impacted income and diluted earnings per share. The (non-GAAP) earnings per share exclude the earnings impact of acquisition-related expenses, prior debt redemption costs and restructuring charges. Aegion management uses such non-GAAP information internally to evaluate financial performance for our operations, as we believe it allows us to more accurately compare our ongoing performance across periods.

Aegion™, the Aegion™ logo, Insituform®, the Insituform® logo, United Pipeline Systems®, Bayou Companies™ and Corrpro® are the registered and unregistered trademarks of Aegion Corporation and its affiliates.