8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report

(Date of earliest event reported):  October 29, 2013

AEGION CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	0-10786	45-3117900
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

17988 Edison Avenue, Chesterfield, Missouri	63005
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (636) 530-8000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

Aegion Corporation (the “Company”) issued an earnings release on October 29, 2013 to announce its financial results for the quarter ended September 30, 2013. A copy of the October 29, 2013 earnings release is furnished herewith as Exhibit 99.1. On October 30, 2013, the Company held a conference call in connection with its October 29, 2013 earnings release. A transcript of the conference call is furnished herewith as Exhibit 99.2.

The information in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

Item 9.01.	Financial Statements and Exhibits.
	(d)	The following exhibits are filed as part of this report:

Exhibit Number	Description
99.1	Earnings Release of Aegion Corporation dated October 29, 2013, filed herewith.
99.2	Transcript of Aegion Corporation’s October 30, 2013 conference call, filed herewith.

*     *     *

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AEGION CORPORATION
By:	/s/ David F. Morris
	David F. Morris
	Senior Vice President, General Counsel
	and Chief Administrative Officer

Date: November 1, 2013

INDEX TO EXHIBITS

These exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K.

Exhibit	Description
99.1	Earnings Release of Aegion Corporation dated October 29, 2013.
99.2	Transcript of Aegion Corporation’s October 30, 2013 conference call.

EX-99.1

EXHIBIT 99.1

AEGION CORPORATION REPORTS THIRD QUARTER 2013

NON-GAAP DILUTED EARNINGS PER SHARE FROM

CONTINUING OPERATIONS OF $0.44

• North American Water and Wastewater third quarter operating income grew 64.2 percent year over year to $10.3 million. Operating margins expanded 270 basis points to 10.8 percent.

• Energy and Mining third quarter non-GAAP¹ operating income declined $6.3 million year-over-year to $15.1 million, including the impact of an earnout reversal in both periods.

• International Water and Wastewater improved non-GAAP operating income by $2.5 million from the third quarter of 2012.

• Commercial and Structural third quarter non-GAAP operating income declined $3.4 million year-over-year to a reported loss of $0.9 million.

• Consolidated backlog as of September 30, 2013 was $714.6 million. North America Water and Wastewater backlog reached $241.7 million, a new anticipated record high. Brinderson backlog was an estimated $209.2 million based on next 12 months maintenance contract revenues and other signed contracts.

St. Louis, MO - October 29, 2013 - Aegion Corporation (Nasdaq Global Select Market: AEGN) today reported financial results for the third quarter and first nine months of 2013. Excluding one-time items defined as non-GAAP, net income from continuing operations in the third quarter totaled $17.0 million, or $0.44 per diluted share, compared to $20.4 million, or $0.51 per diluted share, in the prior year quarter. Net income from continuing operations for the first nine months of 2013 was $34.0 million, or $0.87 per diluted share, compared to net income of $41.0 million, or $1.04 per diluted share, in the first nine months of 2012.

J. Joseph Burgess, Aegion’s President and Chief Executive Officer, commented, “While our North American Water and Wastewater business performed exceptionally well in the third quarter, results from our Energy and Mining and Commercial and Structural businesses did not meet expectations. Each of our businesses will execute the schedule of project activity needed to deliver strong performance in the fourth quarter, while lower than expected results in the third quarter require a modest reduction in our full year non-GAAP diluted earnings per share guidance to $1.45 to $1.50, excluding the expected $0.08 to $0.10 per share contribution from Brinderson. Successful execution of our initiatives will give us the opportunity to end the year above this range.”

^{__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________} 

¹ Reconciliation of all GAAP to non-GAAP financial results in this release begins on page 13. Consolidated third quarter 2013 non-GAAP results exclude a $4.2 million pre-tax charge, or $0.06 per diluted share, for acquisition-related expenses and redemption of debt fees. The first nine months of 2013 contain non-GAAP net charges totaling $2.5 million, or $0.06 per diluted share, for (i) acquisition-related charges, (ii) a gain on the sale of the Company’s 50 percent interest in Insituform Rohrsanierungstechniken GmbH, (iii)redemption of debt fees and (iv) a non-cash write down of the Company’s investment in Bayou Coatings LLC.

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Fourth Quarter and Full Year Outlook

The outstanding third quarter performance by our North American Water and Wastewater business has provided momentum for the final quarter of the year. Although the potential for adverse weather late in the year could limit cured-in-place pipe installation activity, a record backlog of $242 million and the production schedule for October and November are positive signs that this business will be a key catalyst for Aegion’s performance in the fourth quarter, finishing 2013 with expected full year revenues of $345 to $350 million and operating margins in the range of 8 to 9 percent.

The general contractor for the Saudi Arabia Wasit gas field project once again altered the offshore schedule preventing CRTS from executing planned pipe weld coating activities in the third quarter. The revised schedule calls for the offshore installation of the 36-inch trunk pipelines to resume in November, nearly three months later than the previous plan. The result of this scheduling change is a reduction in the contribution from this project for the third and fourth quarters, shifting a majority of the remaining profit contribution into 2014. In the third quarter of 2013, Aegion recognized a $2.8 million reversal of the earnout as negotiated in the CRTS acquisition because of this delay. North America and the Middle East remain the primary Energy and Mining markets driving expected performance in the fourth quarter for United Pipeline Systems and Corrpro. The fourth quarter is traditionally a strong period for Bayou's Canadian pipe coating operations ahead of the winter construction season. Given the delay in the CRTS/Wasit project and soft market conditions in the Gulf of Mexico, South America, and Mexico, full year 2013 revenues for Energy and Mining will likely be in the range of $465 to $470 million with operating margins of 9 to 10 percent, excluding the contribution from Brinderson. Brinderson got off to a good start in the third quarter contributing $47.9 million in revenues and gross profit of $8.5 million. Brinderson has a strong backlog position for the fourth quarter supporting expectations for revenue contributions in the second half to be approximately $115 million at mid-teens gross margins.

The fourth quarter is expected to be the most profitable quarter for the International Water and Wastewater segment as the European business traditionally has a strong quarter to conclude the year and progress on several key projects in Australia and Malaysia supports an anticipated operating profit for the Asia-Pacific business - the first in several years. Full year 2013 outlook for the International Water and Wastewater segment is to deliver operating income in the $3 million to $4 million range for the European segment, while operating income in the Asia-Pacific region is expected to be a modest loss of approximately $1.0million.

Commercial and Structural’s North America business struggled to build momentum in the US during the third quarter. There were four main reasons for this: (1) lower workable backlog at the beginning of the quarter from a stall in sales activity that is being addressed by the ongoing investment in our sales organization; (2) project performance issues from inadequate cost estimation on several key projects in late 2012; (3) customers are taking more time to finalize the award of new contracts and issuing work releases; and (4) certain delays in the setup of new projects in hand, which delayed project execution. Investments to enhance our sales organization are beginning to payoff as the bid table for near term opportunities approached $100 million at the end of the third quarter compared to $40 million at June 30, 2013. Our efforts to enhance the sales organization will continue in the coming months to properly resource and align the organization in its primary end markets: pipelines, buildings and transportation. The second phase of our strategic investments has been accelerated to institute best-in-class project management to ensure consistency in execution on all projects. Global backlog for Commercial and Structural was $48.2 million as of September 30, 2013. We expect a return to profitability in the fourth quarter.

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Mr. Burgess commented, “We’ve stated our intention since the acquisition of the Fyfe businesses to make the necessary investments to expand our leadership position in the rapidly growing global fiber-reinforced polymer market. Although these enhancements to our operations have taken more time to complete, we are committed to these markets and believe in their growth potential. The lower than expected results in the third quarter are expected to result in full year 2013 global Commercial and Structural revenues of between $75 to $80 million with gross margins of 35 to 40 percent. We expect a return to profitability in the fourth quarter and view 2014 as a year for Commercial and Structural to recover and grow from 2013. We believe this business can grow revenues 20 to 25 percent annually over the longer term and achieve gross margins in the range of 35 to 40 percent.”

“The foundation for our growth strategy is the sustainable end markets for our technologies and services in North America, the Middle East, South America and portions of Asia. The demand for energy remains favorable as does the outlook for commercial and industrial structural rehabilitation. We are well positioned in North America and Asia-Pacific for consistency and cash generation in the water and wastewater rehabilitation markets. Although we have not completed our 2014 budget planning process, our existing backlog for 2014 together with 2013 opportunities that have recently shifted into 2014 form a solid foundation for growth. Our expectation is to build on that foundation with prospects in our water and wastewater businesses, significant growth prospects for Brinderson and continued strength in strategic elements of our Energy and Mining platform, most notably Corrpro and United Pipeline Systems.”

Consolidated Highlights

Third Quarter 2013 versus Third Quarter 2012

Revenues increased $44.8 million, or 17.0 percent. Brinderson contributed $47.9 million in revenues in its first quarter as part of Aegion. North American Water and Wastewater revenues increased $18.2 million from increased volume across all geographies. Partially offsetting the increase was a $10.9 million decrease in revenues from our Bayou Coatings operations in New Iberia, Louisiana due to a lull in pipe coating project activity for the oil and gas market in the Gulf of Mexico. Revenues for United Pipeline Systems declined $9.7 million due to the near completion of the large Moroccan project begun last year and curtailment in capital and maintenance spending in the South American mining sector and the Mexican oil and gas market. Revenues for the Commercial and Structural platform were down $3.1 million due to lower workable backlog and customer driven project delays in North America and Asia.

Gross profit increased 10.3 percent, or $6.5 million, to $69.4 million. Brinderson contributed $8.5 million. North American Water and Waster increased gross profit by $4.2 million. The International Water and Wastewater segment increased gross profit by $2.2 million from improved project activity in Australia and Malaysia and a reduction in the 2012 losses in Singapore. United Pipeline Systems saw gross profit decline from the near completion of the large Moroccan project and a curtailment in market activity in Mexico and South America. The soft market conditions in 2013 for pipe coating activities supporting oil and gas development in the Gulf of Mexico had a negative impact on gross profit for Bayou in New Iberia, Louisiana as there was insufficient pipe volume to absorb plant fixed costs. Gross profit for the Commercial and Structural platform declined $3.3 million, primarily from challenges in North America. Consolidated gross margins declined by 130 basis points because of lower margin contribution from Brinderson, lower margins associated with the Moroccan project and a lack of higher margin projects from the prior year at Bayou and pipeline strengthening and rehabilitation projects for Commercial and Structural.

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Operating expenses increased $5.6 million, or 13.2 percent. Brinderson added $5.9 million to operating expense. United Pipeline Systems increased operating expense by $0.4 million to support international expansion and provide additional support to the Moroccan project. Corrpro realized cost savings from ongoing initiatives to enhance sales and operational efficiencies. North American Water and Wastewater operating expenses decreased significantly as a percent of revenue because of efficiency gains achieved over the last two years through project management along with operational and administrative realignment. Operating expenses in International Water and Wastewater have been steady as new investments to improve operational management have been offset by savings from the reduced operations in Singapore and realignment of operations in certain European countries. Operating expenses as a percent of revenue for Commercial and Structural increased as a result of continued investments to build the infrastructure necessary to achieve our growth objectives.

The Company reversed a $2.8 million earnout liability in the third quarter of 2013 to reflect the high probability that CRTS will not achieve its negotiated EBITDA target in 2013 because of the delay in the Wasit project. This compares to a $6.9 million reversal in the third quarter of 2012 largely due to a previous delay in the same project. The earnout reversal in the consolidated statements of operations directly impacts the year-over-year comparison for the Energy and Mining platform.

On a non-GAAP basis, operating income decreased 11.5 percent to $24.3 million. The North American Water and Wastewater segment improved operating performance by $4.0 million, while International Water and Wastewater reduced its operating loss by $2.5 million. Offsetting the improved performance was an operating income decline in our Energy and Mining and Commercial and Structural platforms of $6.3 million and $3.4 million, respectively.

Cash Flow

Net cash flow provided from continuing operations in the first nine months of 2013 was $41.6 million, or 111.5 percent of income from continuing operations, compared to $57.8 million in the first nine months of 2012. The decrease in operating cash flow from 2012 to 2013 was primarily related to slower than anticipated cash collections in the first half of the year from customer-directed project delays across several businesses and lost production days in the first half of 2013 from severe weather. We used $12.6 million of working capital during the nine-month period ended September 30, 2013 compared to $2.8 million used in the comparable period of 2012. Cash collections improved significantly in the third quarter and we expect further improvement in the fourth quarter. Also, in the first nine months of 2013, we incurred $4.2 million in acquisition-related expenses compared to $2.6 million in the first nine months of 2012.

Net cash flow used in investing activities in the first nine months of 2013 was $144.2 million compared to $72.7 million used in the first nine months of 2012. The increase in cash used in 2013 was primarily the result of the third quarter 2013 purchase of Brinderson (for a purchase price of $143.8 million, net of $3.8 million in cash acquired). Also in 2013, we received $18.3 million during the second quarter in connection with the sale of our fifty percent interest in the German joint venture. 2012 capital expenditures of $33.7 million, net of partner payments, reflected a significant investment for our coating facilities in Louisiana and Canada. Capital expenditures in 2013 are expected to be approximately $30 million. Also in 2012, we recorded purchases of Fyfe Asia (for a net purchase price of $39.4 million) and Fyfe Latin America (for a net purchase price of $3.0 million).

Net cash flows from financing activities provided $112.7 million during the first nine months of 2013 compared to $12.4 million provided in the first nine months of 2012. During 2013, we entered into a new credit facility and borrowed $147.6 million (gross purchase price) to fund the purchase of Brinderson and

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used $5.0 million for facility financing fees. During 2012, we borrowed $26.0 million to fund the purchase of Fyfe Asia and for working capital and joint venture investments. In the first nine months of 2013, we used $19.0 million to repurchase 833,552 shares of our common stock through open market purchases and in connection with our equity compensation programs, as compared to $6.4 million to repurchase shares in the first nine months of 2012.

Net cash flow for the first nine months of 2013 was a $7.0 million use of cash.

Consolidated Backlog

AEGION CORPORATION AND SUBSIDIARIES

CONTRACT BACKLOG

(Unaudited in millions)

	September 30, 2013		June 30, 2013		December 31, 2012		September 30, 2012
Energy and Mining (1)	$	172.5	$	193.0	$	240.8	$	246.9
North American Water and Wastewater	241.7		221.1		185.0		167.3
International Water and Wastewater	43.0		44.1		56.6		55.6
Commercial and Structural	48.2		52.2		50.8		46.7
Total hard backlog	505.4		510.4		533.2		516.5
Brinderson (2)	209.2		—		—		—
Total backlog	$	714.6	$	510.4	$	533.2	$	516.5

(1)All periods presented exclude Bayou Welding Works backlog as this business was discontinued in the second quarter of 2013.

(2) Brinderson backlog represents expected unrecognized revenues to be realized under long-term Master Service Agreements (“MSAs”) and other signed contracts. If the remaining term of these arrangements exceeds 12 months, the unrecognized revenues attributable to such arrangements included in backlog are limited to only the next 12 months of expected revenues.

Our Energy and Mining segment contract backlog at September 30, 2013 was $172.5 million, which represented a $20.5 million, or 10.6 percent, decrease compared to June 30, 2013 and a $74.4 million, or 30.1 percent, decrease compared to September 30, 2012. Backlog for United Pipeline Systems declined sequentially and on a year-over-year basis primarily from the near completion of the $65 million project in Morocco awarded in 2012. This project accounted for 12.1 percent of Energy and Mining backlog at September 30, 2012, but only 1.1 percent of Energy and Mining backlog as of September 30, 2013. United Pipeline Systems is also facing a temporary curtailment in capital and maintenance expenditures for the mining sector in South America and oil and gas pipeline infrastructure in Mexico. Corrpro maintained a sizeable backlog as of September 30, 2013, as such, Corrpro's outlook remains strong and it is a source of recurring revenues for Energy and Mining. Backlog for our Bayou operation has been depressed in 2013 because of the timing of pipe coating activity supporting oil and gas offshore projects in the Gulf of Mexico. There are solid signs of a recovery in 2014 from a more active bid table. At the date of acquisition, July 1, 2013, backlog for Brinderson was $201.0 million and increased by 4.1 percent at September 30, 2013.

Contract backlog in our North American Water and Wastewater segment at September 30, 2013 was a record $241.7 million, a $20.6 million, or 9.3 percent, increase from backlog at June 30, 2013 and a $74.4 million, or 44.5 percent, increase from backlog at September 30, 2012. This segment won multiple large projects during the quarter in the Midwest and West regions of the United States. We expect backlog in Canada to remain steady in the coming quarters due to seasonality, while domestic market activity is expected to remain favorable for the remainder of 2013 and into 2014.

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Contract backlog in our International Water and Wastewater segment was $43.0 million at September 30, 2013. This represented a decrease of $1.1 million, or 2.5 percent, compared to June 30, 2013 and a decrease of $12.6 million, or 22.7 percent, compared to September 30, 2012. These decreases were primarily due to current year production in Spain, the Netherlands and Malaysia. We have a number of large near-term bidding opportunities in key markets in Asia. We believe our opportunities for profitable growth are significant if we are successful on these bids.

Contract backlog in our Commercial and Structural segment was $48.2 million at September 30, 2013. This represented a decrease of $4.0 million, or 7.7 percent, compared to June 30, 2013 and an increase of $1.5 million, or 3.2 percent, compared to September 30, 2012. Backlog has been slower to develop in North America than we anticipated. However, a growing bid table from investments made to enhance sales growth holds the promise of a recovery over the near term. In Asia, backlog decreased slightly due to current projects, especially large projects in Hong Kong and Singapore, and reflects delays receiving final awards for new projects in other countries in Asia.

Segment Reporting

Energy and Mining

	Quarters Ended September 30,						Increase (Decrease)
	2013			2012			$			%
Revenues	$	168,708		$	137,386		$	31,322		22.8	%
Gross profit	37,118			33,710			3,408			10.1
Gross profit margin	22.0		%	24.5		%	n/a			(250	)bp
Operating expenses	24,821			19,176			5,645			29.4
Earnout reversal	(2,844		)	(6,892		)	(4,048		)	(58.7	)
Acquisition-related expenses	2,267			—			2,267			n/m
Operating income	12,874			21,426			(8,552		)	(39.9	)
Operating margin	7.6		%	15.6		%	n/a			(800	)bp
Non-GAAP operating income	15,141			21,426			(6,285		)	(29.3	)

	Nine Months Ended September 30,						Increase (Decrease)
	2013			2012			$			%
Revenues	$	385,991		$	377,610		$	8,381		2.2	%
Gross profit	87,678			93,466			(5,788		)	(6.2	)
Gross profit margin	22.7		%	24.8		%	n/a			(210	)bp
Operating expenses	61,866			57,456			4,410			7.7
Earnout reversal	(2,844		)	(6,892		)	(4,048		)	(58.7	)
Acquisition-related expenses	4,175			—			4,175			n/m
Operating income	24,481			42,902			(18,421		)	(42.9	)
Operating margin	6.3		%	11.4		%	n/a			(510	)bp
Non-GAAP operating income	28,656			42,902			(14,246		)	(33.2	)

Third Quarter 2013 versus Third Quarter 2012

Excluding acquisition-related expenses, Energy and Mining operating income decreased $6.3 million to $15.1 million, due principally to a lack of project activity available in the market for our Bayou operations in New Iberia, Louisiana, a decline in market conditions in many of the international markets for United Pipeline Systems, notably the mining sector, and significantly lower operating income from the large

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phosphate lining project in Morocco as this project nears completion. Offsetting the reported decline in operating income was Brinderson’s contribution of $2.6 million in operating income. In addition, revenues and profits were recognized in the third quarter of 2013 from the start of the Wasit gas field project in Saudi Arabia for our CRTS robotic coating operations, although below our plan because of another delay in the offshore production schedule.

During the third quarters of 2013 and 2012, we reversed $2.8 million and $5.9 million, respectively, of the contractual earnouts related to CRTS. In each year, operating results were below the target amounts in the purchase agreement, mostly due to the Wasit project.

North American Water and Wastewater

	Quarters Ended September 30,						Increase (Decrease)
	2013			2012			$		%
Revenues	$	95,997		$	77,818		$	18,179	23.4	%
Gross profit	21,357			17,183			4,174		24.3
Gross profit margin	22.2		%	22.1		%	n/a		10	bp
Operating expenses	11,029			10,894			135		1.2
Operating income	10,328			6,289			4,039		64.2
Operating margin	10.8		%	8.1		%	n/a		270	bp

	Nine Months Ended September 30,						Increase (Decrease)
	2013			2012			$		%
Revenues	$	261,616		$	231,647		$	29,969	12.9	%
Gross profit	55,786			48,850			6,936		14.2
Gross profit margin	21.3		%	21.1		%	n/a		20	bp
Operating expenses	32,776			32,489			287		0.9
Operating income	23,010			16,361			6,649		40.6
Operating margin	8.8		%	7.1		%	n/a		170	bp

Third Quarter 2013 versus Third Quarter 2012

Our North American Water and Wastewater segment achieved a $4.0 million, or 64.2 percent, increase in operating income compared to the prior year quarter. The growth came from increased volume across all geographies, especially large diameter footage, which increased 105 percent compared to the prior year. The Canadian region also contributed because of a shift of work from the first half of 2013 where there was an abnormal amount of weather delays into the third quarter of 2013 and recent project awards in Eastern Canada. Operating margins improved 270 basis points from favorable project mix with large diameter work. We also have maintained our bidding discipline and have experienced increased success from our enhanced estimating and project management structure.

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International Water and Wastewater

	Quarters Ended September 30,						Increase (Decrease)
	2013			2012			$			%
Revenues	$	26,152		$	27,766		$	(1,614	)	(5.8	)%
Gross profit	5,116			2,890			2,226			77.0
Gross profit margin	19.6		%	10.4		%	n/a			920	bp
Operating expenses	5,373			5,640			(267		)	(4.7	)
Acquisition-related expenses	—			445			(445		)	n/m
Operating loss	(257		)	(3,195		)	2,938			92.0
Operating margin	(1.0		)%	(11.5		)%	n/a			1,050	bp
Non-GAAP operating loss	(257		)	(2,750		)	2,493			90.7

	Nine Months Ended September 30,						Increase (Decrease)
	2013			2012			$			%
Revenues	$	80,064		$	80,712		$	(648	)	(0.8	)%
Gross profit	15,424			9,603			5,821			60.6
Gross profit margin	19.3		%	11.9		%	n/a			740	bp
Operating expenses	16,762			16,700			62			0.4
Acquisition-related expenses	—			445			(445		)	n/m
Operating loss	(1,338		)	(7,542		)	6,204			82.3
Operating margin	(1.7		)%	(9.3		)%	n/a			760	bp
Non-GAAP operating loss	(1,338		)	(7,097		)	5,759			81.1

Third Quarter 2013 versus Third Quarter 2012

Excluding acquisition-related expenses, operating income in our International Water and Wastewater improved by $2.5 million, or 90.7 percent, for the third quarter of 2013 compared to the prior year quarter. During the quarter, we reduced losses associated with the legacy projects in Singapore by $1.6 million. We also recognized greater profits from project activity in Australia and Malaysia. Partially offsetting these improvements were project delays from the effects of sustained economic recession impacting activity in France and Switzerland and lower third party tube sales in certain markets in Europe.

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Commercial and Structural

	Quarters Ended September 30,						Increase (Decrease)
	2013			2012			$			%
Revenues	$	16,808		$	19,897		$	(3,089	)	(15.5	)%
Gross profit	5,820			9,148			(3,328		)	(36.4	)
Gross profit margin	34.6		%	46.0		%	n/a			(1,140	)bp
Operating expenses	6,733			6,641			92			1.4
Acquisition-related expenses	—			162			(162		)	n/m
Operating income (loss)	(913		)	2,345			(3,258		)	(138.9	)
Operating margin	(5.4		)%	11.8		%	n/a			(1,720	)bp
Non-GAAP operating income (loss)	(913		)	2,507			(3,420		)	(136.4	)

	Nine Months Ended September 30,						Increase (Decrease)
	2013			2012			$			%
Revenues	$	48,070		$	55,267		$	(7,197	)	(13.0	)%
Gross profit	17,228			25,803			(8,575		)	(33.2	)
Gross profit margin	35.8		%	46.7		%	n/a			(1,090	)bp
Operating expenses	18,708			18,669			39			0.2
Acquisition-related expenses	—			2,149			(2,149		)	n/m
Operating income (loss)	(1,480		)	4,985			(6,465		)	(129.7	)
Operating margin	(3.1		)%	9.0		%	n/a			(1,210	)bp
Non-GAAP operating income (loss)	(1,480		)	7,134			(8,614		)	(120.7	)

Third Quarter 2013 versus Third Quarter 2012

Operating income, excluding acquisition-related expenses, in our Commercial and Structural platform decreased $3.4 million, or 136.4 percent. The North America operations had lower workable backlog, project performance issues, customer driven project delays and fewer higher margin pipeline projects than in the prior year period. In addition, our Asian operations experienced delays on several large projects. Partially offsetting the operating income decline was a large manufacturing material order for our Canadian operations. We are repositioning the North American business to accelerate growth from the challenges experienced so far in 2013. The enhancements to the sales organization are to be completed in the coming months. The bid table has improved over the past few months bolstering expectations for a return to profitability in the fourth quarter and for growth in 2014. Further investments are underway to improve our project management capabilities in order to enhance profitability.

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Aegion Corporation is a global leader in infrastructure protection and maintenance, providing proprietary technologies and services to (i) protect against the corrosion of industrial pipelines; (ii) rehabilitate and strengthen water, wastewater, energy and mining piping systems and buildings, bridges, tunnels and waterfront structures; and (iii) utilize integrated professional services in engineering, procurement, construction, maintenance and turnaround services to a broad range of energy related industries. More information about Aegion can be found on our 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, 2012, as filed with the Securities and Exchange Commission on February 27, 2013. 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

We have presented certain information in this release excluding certain items that impacted income, expense and earnings per share from continuing operations. The (non-GAAP) earnings per share exclude the earnings impact of acquisition-related expenses, charges associated with our decision to liquidate Bayou Welding Works and a goodwill write-down associated with the anticipated sale of our shares in Bayou Coatings, LLC. 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^®, Tite Liner^®, Bayou Companies^®, Corrpro^®, CRTS™, Fibrwrap^®, Fyfe^® and Brinderson^® are the registered and unregistered trademarks of Aegion Corporation and its affiliates.

CONTACT:	Aegion Corporation
	David A. Martin, Senior Vice President and Chief Financial Officer
	(636) 530-8000

10

AEGION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except share and per share information)

	For the Quarters Ended September 30,						For the Nine Months Ended September 30,
	2013			2012			2013			2012
Revenues	$	307,665		$	262,867		$	775,741		$	745,236
Cost of revenues	238,254			199,936			599,625			567,514
Gross profit	69,411			62,931			176,116			177,722
Operating expenses	47,956			42,351			130,112			125,314
Reversal of earnout	(2,844		)	(6,892		)	(2,844		)	(6,892		)
Acquisition-related expenses	2,267			607			4,175			2,594
Operating income	22,032			26,865			44,673			56,706
Other income (expense):
Interest expense	(5,454		)	(2,481		)	(10,033		)	(7,591		)
Interest income	40			86			158			230
Other	(522		)	(237		)	6,561			(1,169		)
Total other expense	(5,936		)	(2,632		)	(3,314		)	(8,530		)
Income before taxes on income	16,096			24,233			41,359			48,176
Taxes on income	3,164			5,064			7,985			11,862
Income before equity in earnings of affiliated companies	12,932			19,169			33,374			36,314
Equity in earnings of affiliated companies	1,691			2,001			3,903			4,389
Income from continuing operations	14,623			21,170			37,277			40,703
Loss from discontinued operations	(558		)	(435		)	(6,456		)	(880		)
Net income	14,065			20,735			30,821			39,823
Non-controlling interests	(127		)	(1,191		)	(959		)	(2,057		)
Net income attributable to Aegion Corporation	$	13,938		$	19,544		$	29,862		$	37,766
Earnings per share attributable to Aegion Corporation:
Basic:
Income from continuing operations	$	0.37		$	0.51		$	0.94		$	0.98
Loss from discontinued operations	(0.01		)	(0.01		)	(0.17		)	(0.02		)
Net income	$	0.36		$	0.50		$	0.77		$	0.96
Diluted:
Income from continuing operations	$	0.37		$	0.50		$	0.93		$	0.97
Loss from discontinued operations	(0.01		)	(0.01		)	(0.17		)	(0.02		)
Net income	$	0.36		$	0.49		$	0.76		$	0.95
Weighted average shares outstanding - Basic	38,672,441			39,285,484			38,836,276			39,253,373
Weighted average shares outstanding - Diluted	39,071,373			39,605,229			39,228,625			39,559,614

11

AEGION CORPORATION AND SUBSIDIARIES

STATEMENT OF OPERATIONS RECONCILIATION

(Unaudited) (Non-GAAP)

(in thousands, except share and per share information)

For the Quarter Ended September 30, 2013

	Consolidated			Acquisition-Related Expenses			Credit Facility Fees		Total
Affected Line Items:
Operating expenses	$	50,223		$	(2,267	)	$	—	$	47,956
Operating income	22,032			2,267			—		24,299
Interest expense	(5,454		)	—			1,964		(3,490		)
Income before taxes on income	16,096			2,267			1,964		20,327
Taxes on income	3,164			902			782		4,848
Income from continuing operations attributable to Aegion Corporation (1)	14,496			1,365			1,182		17,043
Diluted earnings per share:
Income from continuing operations attributable to Aegion Corporation (1)	$	0.37		$	0.03		$	0.03	$	0.44

⁽¹⁾ Includes non-controlling interests and equity in earnings of affiliated companies.

For the Quarter Ended September 30, 2012

	Consolidated		Acquisition-Related Expenses			Total
Affected Line Items:
Operating expenses	$	42,958	$	(607	)	$	42,351
Operating income	26,865		607			27,472
Income before taxes on income	24,233		607			24,840
Taxes on income	5,064		233			5,297
Income from continuing operations attributable to Aegion Corporation (1)	19,979		374			20,353
Diluted earnings per share:
Income from continuing operations attributable to Aegion Corporation (1)	$	0.50	$	0.01		$	0.51

⁽¹⁾ Includes non-controlling interests and equity in earnings of affiliated companies.

12

AEGION CORPORATION AND SUBSIDIARIES

STATEMENT OF OPERATIONS RECONCILIATION

(Unaudited) (Non-GAAP)

(in thousands, except share and per share information)

For the Nine-Month Period Ended September 30, 2013

	Consolidated			Acquisition-Related Expenses			Credit Facility Fees		Joint Venture/Divestiture Activity			Total
Affected Line Items:
Operating expenses	$	134,287		$	(4,175	)	$	—	$	—		$	130,112
Operating income	44,673			4,175			—		—			48,848
Interest expense	(10,033		)	—			1,964		—			(8,069		)
Other	6,561			—			—		(8,688		)	(2,127		)
Income before taxes on income	41,359			4,175			1,964		(8,688		)	38,810
Taxes on income	7,985			1,662			782		(2,635		)	7,794
Income from continuing operations attributable to Aegion Corporation (1)	36,318			2,513			1,182		(6,053		)	33,960
Diluted earnings per share:
Income from continuing operations attributable to Aegion Corporation (1)	$	0.93		$	0.06		$	0.03	$	(0.15	)	$	0.87

⁽¹⁾ Includes non-controlling interests and equity in earnings of affiliated companies.

For the Nine-Month Period Ended September 30, 2012

	Consolidated		Acquisition-Related Expenses			Total
Affected Line Items:
Operating expenses	$	127,908	$	(2,594	)	$	125,314
Operating income	56,706		2,594			59,300
Income before taxes on income	48,176		2,594			50,770
Taxes on income	11,862		247			12,109
Income from continuing operations attributable to Aegion Corporation (1)	38,646		2,347			40,993
Diluted earnings per share:
Income from continuing operations attributable to Aegion Corporation (1)	$	0.97	$	0.06		$	1.04

⁽¹⁾ Includes non-controlling interests and equity in earnings of affiliated companies.

13

AEGION CORPORATION AND SUBSIDIARIES

SEGMENT DATA

(in thousands)

	Quarters Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Revenues:
Energy and Mining	$	168,708		$	137,386		$	385,991		$	377,610
North American Water and Wastewater	95,997			77,818			261,616			231,647
International Water and Wastewater	26,152			27,766			80,064			80,712
Commercial and Structural	16,808			19,897			48,070			55,267
Total revenues	$	307,665		$	262,867		$	775,741		$	745,236
Gross profit:
Energy and Mining	$	37,118		$	33,710		$	87,678		$	93,466
North American Water and Wastewater	21,357			17,183			55,786			48,850
International Water and Wastewater	5,116			2,890			15,424			9,603
Commercial and Structural	5,820			9,148			17,228			25,803
Total gross profit	$	69,411		$	62,931		$	176,116		$	177,722
Operating income (loss):
Energy and Mining	$	12,874		$	21,426		$	24,481		$	42,902
North American Water and Wastewater	10,328			6,289			23,010			16,361
International Water and Wastewater	(257		)	(3,195		)	(1,338		)	(7,542		)
Commercial and Structural	(913		)	2,345			(1,480		)	4,985
Total operating income	$	22,032		$	26,865		$	44,673		$	56,706

14

AEGION CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share amounts)

	September 30, 2013		December 31, 2012
Assets
Current assets
Cash and cash equivalents	$	126,687	$	133,676
Restricted cash	523		382
Receivables, net	238,585		232,854
Retainage	31,392		30,172
Costs and estimated earnings in excess of billings	93,443		67,740
Inventories	61,764		59,123
Prepaid expenses and other current assets	32,724		27,728
Current assets of discontinued operations	12,365		8,986
Total current assets	597,483		560,661
Property, plant & equipment, less accumulated depreciation	187,294		183,163
Other assets
Goodwill	334,416		272,294
Identified intangible assets, less accumulated amortization	212,506		159,629
Investments	10,920		19,181
Deferred income tax assets	7,731		7,989
Other assets	13,241		8,153
Total other assets	578,814		467,246
Non-current assets of discontinued operations	1,242		6,824
Total Assets	$	1,364,833	$	1,217,894
Liabilities and Equity
Current liabilities
Accounts payable	$	85,091	$	74,724
Accrued expenses	88,393		79,580
Billings in excess of costs and estimated earnings	24,953		31,552
Current maturities of long-term debt and line of credit	26,879		33,775
Current liabilities of discontinued operations	2,401		4,885
Total current liabilities	227,717		224,516
Long-term debt, less current maturities	366,469		221,848
Deferred income tax liabilities	37,140		39,790
Other non-current liabilities	11,354		15,620
Total liabilities	642,680		501,774
Equity
Preferred stock, undesignated, $.10 par – shares authorized 2,000,000; none outstanding	—		—
Common stock, $.01 par – shares authorized 125,000,000; shares issued and outstanding 38,576,118 and 38,952,561, respectively	386		390
Additional paid-in capital	244,189		257,209
Retained earnings	456,319		426,457
Accumulated other comprehensive income	3,615		15,260
Total stockholders’ equity	704,509		699,316
Non-controlling interests	17,644		16,804
Total equity	722,153		716,120
Total Liabilities and Equity	$	1,364,833	$	1,217,894

15

AEGION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (in thousands)

	For the Nine Months Ended September 30,
	2013			2012
Cash flows from operating activities:
Net income	$	30,821		$	39,823
Loss from discontinued operations	6,456			880
	37,277			40,703
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization	29,126			28,743
Gain on sale of fixed assets	(815		)	(246		)
Equity-based compensation expense	5,090			5,246
Deferred income taxes	(1,523		)	(1,800		)
Equity in earnings of affiliated companies	(3,903		)	(4,389		)
Debt issuance costs	1,964			—
Earnout reversal	(2,844		)	(6,892		)
Gain on sale of interests in German joint venture	(11,771		)	—
Loss on foreign currency transactions	1,700			138
Other	(159		)	(913		)
Changes in operating assets and liabilities (net of acquisitions):
Restricted cash	(142		)	(359		)
Return on equity of affiliated companies	4,027			5,002
Receivables net, retainage and costs and estimated earnings in excess of billings	(11,144		)	3,760
Inventories	(3,416		)	(6,333		)
Prepaid expenses and other assets	(5,044		)	(2,624		)
Accounts payable and accrued expenses	2,932			(3,980		)
Other operating	198			1,773
Net cash provided by operating activities of continuing operations	41,553			57,829
Net cash provided by (used in) operating activities of discontinued operations	(10,179		)	863
Net cash provided by operating activities	31,374			58,692
Cash flows from investing activities:
Capital expenditures	(20,079		)	(33,710		)
Proceeds from sale of fixed assets	1,856			3,399
Patent expenditures	(469		)	(420		)
Sale of interests in German joint venture	18,300			—
Receipt of cash from Hockway sellers due to final net working capital adjustments	—			1,048
Purchase of Brinderson, net of cash acquired	(143,763		)	—
Purchase of Fyfe Latin America, net of cash acquired	—			(3,048		)
Purchase of Fyfe Asia, net of cash acquired	—			(39,415		)
Payment to Fyfe North America sellers for final net working capital adjustments	—			(532		)
Net cash used in investing activities of continuing operations	(144,155		)	(72,678		)
Net cash provided by (used in) investing activities of discontinued operations	774			(1,002		)
Net cash used in investing activities	(143,381		)	(73,680		)
Cash flows from financing activities:
Proceeds from issuance of common stock upon stock option exercises, including tax effects	903			840
Repurchase of common stock	(19,017		)	(6,354		)
Investments from noncontrolling interests	—			4,939
Payment of earnout related to acquistion of CRTS, Inc.	(2,112		)	—
Credit facility financing fees	(5,013		)	—
Proceeds on notes payable	1,541			5,608
Principal payments on notes payable	—			(890		)
Proceeds from line of credit	—			26,000
Proceeds from long-term debt	385,500			983
Principal payments on long-term debt	(249,125		)	(18,750		)
Net cash provided by financing activities	112,677			12,376
Effect of exchange rate changes on cash	(7,659		)	(2,203		)
Net decrease in cash and cash equivalents for the period	(6,989		)	(4,815		)
Cash and cash equivalents, beginning of period	133,676			106,129
Cash and cash equivalents, end of period	$	126,687		$	101,314

16

EX-99.2

EXHIBIT 99.2

AEGION CORPORATION

Moderators: John Joseph Burgess and David A. Martin

October 30, 2013

9:30 a.m. ET

Operator: Good morning, and welcome to Aegion Corporation’s Third Quarter 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later there will be a question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touch-tone telephone. As a reminder, this event is being recorded.

Management has provided a presentation to summarize the financial results and outlook. The presentation can be found on Aegion's website at www.aegion.com. Any financial or statistical information presented during this call, including any non-GAAP information, the most directly comparable GAAP measures and reconciliation to GAAP results, will be available on Aegion's website at www.aegion.com.

During this conference call, the Company will make forward-looking statements, which are inherently subject to risks and uncertainties. Results could differ materially from those currently anticipated due to a number of factors described in our SEC filings and throughout this conference call. The Company does not assume any duty to update forward-looking statements. Please use caution and do not rely on such statements.

I would now turn the call over to Joe Burgess, President and CEO of Aegion. Sir, you may begin.

John Joseph Burgess: Thank you, and welcome to our quarterly earnings call. With me today are David Martin, Senior Vice President and Chief Financial Officer; David Morris, Senior Vice President and General Counsel; and Ruben Mella, Vice President of Investor Relations and Corporate Communications.

As we've outlined in the earnings material, the third quarter came up short of our expectations. The North American Water and Wastewater segment performed exceptionally well, and our International Water and Wastewater segment continues to improve. However, we continued to encounter project delays and isolated market weakness in parts of Energy and Mining, and we didn't recover in the third quarter from the persistent delays and underperformance in the Commercial and Structural platform.

We have solid prospects in front of us, and we expect a very strong fourth quarter. And I'll describe those performance factors in a few minutes. As stated in our release, we lowered our overall guidance for the year to $1.45 to $1.50, excluding an expected $0.08 to $0.10 contribution from Brinderson, although our management team is determined to work to claw back to the $1.50 we stated last quarter.

We remain positive about the end markets we serve with our technologies and services. They've given us the opportunity to grow and position the Company for a dynamic future. I'll discuss that later. But with that, I'll let David give you a quick financial overview of the third quarter. David?

David A. Martin: Thank you, Joe; and good morning. Last night, we reported our third quarter non-GAAP earnings per share from continuing operations of $0.44. This compares to $0.51 in the third quarter of 2012. Well, let me focus my discussion on four areas that drove our quarterly performance.

First, a core tenet of our growth strategy is improving execution, and we accomplished that in large part in the quarter.

Second, Brinderson got off to a good start in its first quarter as part of Aegion.

1

Third, we continue to face the same project delay challenges that we've been dealing with all year in many parts of our project-oriented businesses.

And finally, we continued to experience challenges in our core Commercial and Structural platform, surrounding large project delays, translating sales opportunities into executable projects, and unfavorable mix impacting margins. Let me expand on these briefly.

Let's start with execution, which was quite good for many of our key businesses. The prime example is North American Water and Wastewater, which had an outstanding quarter in their seasonal high point of the year.

Revenues increased 23.2 percent from the third quarter of 2012, as all geographies in North America had experienced improved backlog and improved productivity. Operating margins were strong at 10.8 percent. With increased volume and favorable mix of large diameter, our manufacturing and wet-out operations saw increases in efficiency, driving margins through the business. We were also able to drive efficiencies in leveraging our operating expenses with the revenue growth.

Weather finally cooperated in Queensland, and our Australian operations achieved a record month in August, driven by our ability to execute mainly in the large-diameter projects. Our lining projects in Malaysia remain ahead of schedule from continued strong execution. Our improved performance in Australia and Malaysia, coupled with the lack of drag from our Singapore operations, which were significant in 2012, helped deliver a $3.4 million improvement in Asia Pacific operating income compared to last year, excluding prior-year acquisition-related expenses.

Corrpro's revenues grew 3.3 percent in the quarter compared to a record third quarter in 2012. Gross profit was slightly lower than what Corrpro achieved last year. US fell off a bit in the quarter as expected after a very strong first half. The results in Canada were indicative of record backlog going into the quarter, with strong performance in the East and West regions of the country. Total operating margins were 14.3 percent before corporate allocations.

United Pipeline performed well in North America and the Middle East. We successfully executed several large projects in Canada, despite soft ground conditions. In the US, we completed repeat business with several longtime customers, including work in the Permian Basin. The strength in the Middle East for United comes from good execution on two key projects in Kuwait and continued work in Oman. More importantly, we've accrued productivity and, therefore, margins as we get more experience working with the customers we serve in the region. The results in the Middle East were significantly better than this time last year, more than offsetting the additional cost incurred on the Moroccan project as we closed it out.

Let me turn to Brinderson, which delivered its first quarterly results as part of Aegion. The third quarter is the seasonal low point for Brinderson's core maintenance activities since refineries are at peak output during the summer months. Brinderson contributed $0.02 to our earnings per share in the quarter, net of additional interest expense for the acquisition. More than 50 percent of the revenues came from the upstream segment, which carries higher gross margins than the Company's downstream market. Overall, we're very pleased with the Brinderson's initial contributions to Aegion's financial results, and the integration efforts are all going very well.

We've talked about the challenges we faced this year in terms of project delays and certain temporary market dynamics. Those were evident in the third quarter. A soft pipeline coating market for oil and gas projects in the Gulf of Mexico continued to impact our Bayou New Iberia operations. We've nearly completed one significant project in our backlog with the bid table now supporting opportunities for 2014.

Value profitability depends on two factors: First, the adequate volume to absorb the plant fixed cost. And second, the execution of higher-margin coating projects. We lack both these important elements at New Iberia in the quarter, resulting in a $2.9 million decline in total gross profit for Bayou compared to the same period last year. Partially offsetting this was solid performance in

2

Canada, as our Bayou operations have been gaining momentum and will continue to gear up for the upcoming busy winter construction season.

We've talked previously about the difficulty of making year-over-year comparisons for United because of the large project in Morocco. That is now winding down. In the third quarter of 2012, our Morocco project accounted for 31 percent of United's revenues compared to only 14 percent this year. Gross margins would have been higher than the reported 20.9 percent had it not been for additional cost needed to accelerate the remaining Tite Liner installations after resolving last quarter's pipe connection issues.

We also faced another delay on the CRTS/Wasit project. Despite numerous scheduling challenges over the last 12 months to 18 months, the lay barge did set sail in August. However, we did not begin offshore coating on the welded pipe connections for the 36-inch trunk lines until early September. Our progress was then suspended when the general contractor updated the barge schedule to include previously unreported seafloor trenching activity for these trunk lines, limiting the production work we could accomplish in the quarter.

Our crews are planning to restart coating production in the coming weeks. We began the quarter with $22 million in remaining revenues for this project. I think it's reasonable to expect approximately two-thirds of that total to be completed in 2014. As a result, we were required to revalue the remaining earn-out based on the 2013 EBITDA targets specified in the acquisition contract. And therefore, $2.8 million was reversed in the quarter, worth about $0.07 per share. In the third quarter of last year, we reversed $5.9 million related to similar delays in the Wasit project.

Finally, translating backlog into active projects was unexpectedly slow for the North American segment of the Commercial and Structural platform. Fyfe North America has struggled to gain momentum in the U.S. during its typical busiest quarter of the year. We have a growing line of sight in near-term projects, especially in the pipeline and building end markets.

The challenges we face were a lack of workable backlog, as well as some cost absorption from insufficient cost estimating on some project bids in the second half of 2012. In addition, some of our customers took more time to finalize contracts and issue work releases. Finally, we experienced delays in efficiently getting some of these projects into the hands of our crews for execution. The challenges in the North American market were primary reasons for reported operating loss in the quarter.

Fyfe Asia continues to depend on large project activity in Hong Kong and Singapore. We spoke in previous quarters about our labor shortage brought on by government restrictions on foreign labor. That continued to be an issue this quarter for the general contractors we work through as subcontractors. Despite these difficulties, we were able to make some progress in the quarter, and I expect to see improved production in the fourth quarter.

Now let me just close with a brief review of cash from operations. Third quarter cash flow from operations was $24.4 million compared $11.8 million in the prior year period. Net change in working capital was a $2.3 million source of cash in the quarter compared to $6.7 million use of cash from the third quarter of 2012. DSOs declined about 7 percent as we improve cash collections in our Water and Wastewater platform, and the DSOs from Brinderson are at much lower levels than the rest of our business.

As I mentioned last quarter, our objective is to increase collections in the second half of the year, and I expect that will continue into the fourth quarter. I'm revising full-year outlook for the cash flow from operations to be roughly $90 million as we have pushed revenue into the fourth quarter. We may experience a working capital pinch as a result. This is merely related to timing of the billings and collections as the health of the business remains strong. The guidance for cash flow from operations excludes the $4 million we spent on deal cost for the Brinderson acquisition.

We spent $3.1 million in the quarter to repurchase shares as part of our current $10 million authorization. Finally, I have revised the outlook for the capital expenditures for the year to be approximately $30 million, inclusive of Brinderson.

3

That summarizes the review of the quarter, so I'll turn the call back over to Joe.

John Joseph Burgess: Thanks, David. Today, I will spend my time reviewing the primary factors that are driving our expectations for a strong fourth quarter. Secondly, I'll take you through my thoughts on the status and outlook on our Commercial and Structural platform, given the level of volatility that we have experienced so far in 2013. And then I'll conclude with a review of our business platforms to give you a flavor for how we believe that we are firmly established for growth in 2014 and beyond.

As we examined our internal forecasts for the fourth quarter of each of our businesses and then calibrated against the normal risk factors, most notably, project timing, weather and general execution risks, we believe it was prudent to trim the full-year EPS guidance range slightly. Obviously, the third quarter performance played a factor in how the year has shaped up. Nevertheless, the fourth quarter appears to us to be a very strong quarter, and that is really driven by a short list of performance factors that I will describe.

Many parts of our Energy and Mining platform are expected to be in full swing as we remain in the busy season before the holidays. First of all, we anticipate solid production for approximately 45 days on the Wasit project during the fourth quarter, certainly subject to productivity and schedule risks, which we have tried to factor into our guidance. David already described the status of the project. But with this schedule, we anticipate a nice contribution in the fourth quarter, above our third quarter performance.

Secondly, our coatings operation in Canada is ramping up for the busy construction season, a significant improvement in profitability quarter-over-quarter. Our Louisiana coating plants should also see pickups in profitability from a number of small projects scheduled, which were not executed in the third quarter. UPS's results should improve quarter-over-quarter, as our backlog in the US, Canada, and the Middle East is strong, and we have a strong fourth quarter production schedule.

In the third quarter, operating income was somewhat dampened by additional cost on the Morocco project that were incurred to accelerate production. These costs will not be recurring in the fourth quarter.

Brinderson got off to a nice start for us and achieved our expected result, but Q3 is the seasonally light quarter of the year for maintenance activities. Weekly billable hours are ramping up, increasing more than 10 percent so far in the quarter across most of their maintenance programs, and we anticipate executing a number of highly profitable maintenance turnaround projects in the fourth quarter, which will boost operating income significantly. We anticipate Corrpro to deliver similar profitability levels as in the third quarter on solid backlog levels and a normal push to complete projects before winter by major customers.

Looking at Water and Wastewater, the outstanding third quarter performance by North American Water and Wastewater business is expected to continue in the fourth quarter. We have a robust schedule of projects to be completed in October and November, with a nice mix of medium and large diameter work. Our backlog position is at a record level of $242 million, with another $50 million from projects that were in the process of being awarded and signed at the end of the quarter. We don't expect to see any significant drop off in profitability compared to the third quarter, which would normally occur with seasonality in the holidays.

The International Water and Wastewater profitability should also improve during the fourth quarter, with solid profitability from ongoing projects in Malaysia and Australia, coupled with the lack of losses seen in Singapore in the third quarter as we completed the last defect rectification work. Our European operations also expect to see improved profitability as our primary contracting operations will be in their strongest quarter from a business seasonality standpoint, and we have solid backlog in places such as the Netherlands and Spain.

Finally, while it has been a significantly difficult year for Commercial and Structural, we anticipate a return to profitability in the fourth quarter. We have good line of sight on executable work in the United States and in Asia.

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So you put all these pieces together, and it adds up to a significant probability improvement in the fourth quarter. We believe we're off to a good start in October, while we understand that there are a number of pieces that need to fall into place, and we can't have significant impacts from adverse weather or other project delays. Our business unit managers are focused on delivering a strong finish to 2013, and we are committed to it.

We came into the year with a strong belief in our positioning relative to our markets, and we expected to see a record year. That hasn't been the case as unprecedented volatility related to certain performance factors, notably project delays across E&M and C&S, along with other market challenges that were unforeseen.

Let's take a look at that in more detail, and I'll start with Water and Wastewater. Our North American Water and Wastewater business has exceeded our expectations both in revenue growth and in operating margins. The International Water and Wastewater is essentially on par with how we expected, while we have encountered approximately $2 million in additional cost to close out the Singapore projects during the year, keeping us just under the breakeven point. But overall, a good story in Water and Wastewater.

Turning to Energy and Mining, the Corrpro business has performed very well. We haven't seen the anticipated 10 percent growth due to market challenges in certain regional pockets of the US and in the Middle East, but we have made that up in efficiencies and lower cost to have a higher operating margin.

United Pipeline has performed better than expected in the domestic core markets, while we have experienced a lull in spending in the international mining markets. This has impacted our profitability by approximately $2 million pretax. Very early in the year, we saw a slip in the delivery of pipe and the coating schedules for major projects slated for 2013 in our New Iberia facilities, and that has had a major impact on profitability in Bayou. Profitability impact from our original expectation for the full year due to these delays is approximately $8 million pretax.

CRTS has experienced significant delays, again, on the Wasit project. We also saw project slippage on work in Brazil during 2013. The impact in 2013 of these issues is approximately $5 million, which was offset somewhat by $2.8 million in earn-out reversals.

Finally, Commercial and Structural, we have talked about the numerous issues that have impacted the C&S business all year in terms of the downturn and number of pipeline projects in the market this year, along with the number of large project delays and underperformance on projects. From our original expectation, this business is down approximately $9 million pretax for the full year.

If you add up the negative impacts on the business this year in terms of delays, market challenges, and the overall C&S business climate, it adds up to over $20 million, a conservative $0.35 of earnings per share. We're offsetting a portion of this through the expected and even better-than-expected performance in NAR, Corrpro and North American markets for United and Bayou Canada. These businesses account for about 70 percent of revenues and the majority of our profits.

I think in the long-term, this demonstrates the strength of the diversity in our businesses that allows us to weather challenging times. I also have to include the expected accretion from Brinderson, its first six months with us, adding approximately $0.08 to $0.10 to the bottom line.

Let me make some additional comments about Fyfe, given some of the performance characteristics that we've described previously. We're obviously disappointed with results in the business for the quarter and the year. As you might imagine, we've been spending considerable time getting the business back on track. I'd like to take a few minutes talking through that.

Let me just start by refreshing Aegion's history with the business. We started looking at Fyfe and Fibrwrap technology in 2010, as we were looking to strengthen our offering in the drinking water or pressure pipe segment. As we studied the capabilities of the technology and the markets they served, we believe that the opportunities were excellent in pipe repair, but also, and to some degree,

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larger in building strengthening and repair and transportation infrastructure. The business had achieved a 15 percent revenue CAGR from 2008 to 2010, and we believe we could accelerate that with the appropriate sales and marketing investments.

We acquired the North American business midyear 2011 and the Asian operation in April 2012. We paid 10x 12-month trailing EBITDA for both businesses. Partial 2011 performance was as expected; 2012 after a slow start, finished strong particularly in the pipeline segment. Entering 2013, we felt the business would hit its 25 percent to 30 percent growth targets. While hard backlog was not as high as we would like, it is largely a go-get business with projects not sitting in backlog for very long.

With hindsight, we clearly lack the visibility into a large enough sales funnel to support the sales growth we anticipated.

So what are the issues, and what are we doing about it? The first issue is people. We lost some people early in the year that played significant roles in primarily the pipe business. That, coupled with the previously discussed delays on the nuclear pipe jobs, combined to decelerate growth in this high-margin area. Additionally, it has taken longer to staff the business around the market verticals that will drive future growth in pipes and buildings and in transportation. We are close now to having this team in place.

The second issue has been a need to upgrade the sales and implementation process across the board. I mentioned the lack of visibility to the sales funnel earlier. We have responded by implementing Aegion's standard CRM during the year, which is increasing sales productivity and visibility. The funnel, as we call it, has doubled in the last six months as we take a more formal approach to the sales discipline.

A related issue, however, is a very slow book-to-burn process. For longtime followers, this is an issue that has plagued Insituform in the past. It manifests some production schedule lumpiness, which means that sometimes you have idle crews and equipment and then not enough. The cost and performance issues are obvious. We've been working to increase the level of production reporting and it's visibility to sales, engineering, and manufacturing. Again, our standard is the visibility and functionality we have in our Wastewater business.

A more subtle and difficult improvement is product simplification. Fibrwrap is a highly engineered product, but it doesn't have to be a science fair every time out. There are significant portions of the building and transportation verticals that need product simplification to close down the implementation window and lower delivered cost.

And lastly, we need to be more focused within the market verticals on projects that are driven by regulation and/or government spend. The pipe business will move closer to NAR to benefit from the level of market exposure and client knowledge. The business is focusing on creative dedicated teams to target nuclear and industrial pipeline projects. The building segment will focus on markets with clear upgrade drivers, seismic, hospital, storm and the like. General maintenance projects are too easily commoditized or converted to alternative products. Transportation teams will follow government dollars.

Third, we need to accelerate the transfer of country expertise in our Asian business. We must have full capability across the major verticals in our key markets of Singapore, Hong Kong, Japan, and Indonesia. A year like this forces a reassessment of the business. This work has reconfirmed the strength of the product and of the markets. I believe that improvement and achievement in the areas discussed earlier will return the business to an impressive growth track in 2014.

Now, let's look more broadly at the outlook for the businesses we need for growth in 2014. I think the results indicate that two years ago, we transformed the North American Water and Wastewater platform. At the core of this transformation is the need to become a premier project management organization. We made investments to improve our capabilities in bid estimation, optimizing crew utilization, and improved execution to drive consistency.

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What we achieved in the third quarter and, in fact, all year is the results of the efforts over the last two years. The performance metrics we track are all favorable as bid margins remain in our targeted range, while we are holding our share of the market. The record backlog and near-term acquisitions I mentioned give us confidence about the outlook for 2014 in a North American market that is stable, with pockets of growth emerging in several municipalities that are beginning the execution phase of their EPA consent decrees. We have the scale and capabilities to pursue these opportunities. However, our focus will remain on profitable growth by maintaining bid margins and strong project management that we've been able to achieve since last year.

We also believe 2014 can be a year for a meaningful contribution from the International Water and Wastewater teams. We have seen a relatively stable market in Europe this year, and we expect that to continue into 2014. The primary growth vehicle can be India, as it has the potential to be a strong market with several significant internationally financed bid opportunities to evaluate. Quality of those procurements and the profitability we see in them will determine our future in that market, but we feel good about what we've been able to impact to this point.

We've learned to successfully target opportunities in other markets such as Malaysia, with an approach that does not rely on an in-country investment to build a presence. And then, finally, Australia remains a good contracting market for us, where we've made good progress this year expanding our presence into other regions outside Sydney and, specifically, into Brisbane.

Turning to Energy and Mining, Corrpro continues to be the most important of the Energy and Mining businesses, not only because of its size, but because of its roles of source for recurring revenues. We see continued strength in the core North American market going into 2014 based on the need for the pipeline inspection services we offer to help our customers meet regulatory requirements and pipeline safety.

We also believe we'll see some opportunities for Corrpro to gain access to the upstream and downstream markets, primarily on the West Coast, through Brinderson's embedded positions in those facilities. And we expect to see improvement in the Middle East, as we place additional focus on growing our market opportunities in this important region.

Some of you might think of United Pipeline Systems as a volatile business, but the growth we've seen over the last six years really demonstrates tremendous consistent growth. We are essentially done with the project in Morocco. The project delivered $7.5 million in operating income to our bottom line, despite falling short of our original estimate. The Middle East has very quickly become a growth market for UPS. Backlog has been consistently in the range of $30 million or better, providing a solid foundation for additional growth. Where we are seeing the steady growth has been in North America, with a compounded annual revenue growth rate of 10 percent from 2008 to where we expect to end this year. This market is driven primarily by pipeline maintenance.

Given the strong outlook for energy markets in North America, we believe this will remain a key market for us while we pursue growth in international markets. And that's what has been missing in 2013; international projects in our South American market, primarily the mining industry in Chile, delays in further investments in the mining activity in Australia and deferral of some projects in some oil and gas market such as Mexico. We believe there are opportunities for United to grow internationally because our pipeline or technology is still not present in many additional markets.

The outlook in South America and Mexico will remain challenging. We've seen this cycle before in Chile after 20 years in that market, and those long-term relationships will help us when that market recovers. In our core North American and Middle East markets, we expect 2014 to be another good year.

The Gulf of Mexico market for pipeline coatings has a potential for a recovery in 2014 based on the bid table we see for Bayou New Iberia. Although our reported backlog is down from the end of the year-ago period, it does not include the $20 million Westward Ho whole project that has been moved into 2014, which is pending receipt of the purchase order.

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Overall, the bid table for Bayou New Iberia has improved and currently stands at more than $50 million, including installation project opportunities for our new installation facility. Bayou Canada's business continues to be profitable and is well positioned to meet the ongoing demand for pipe coating to primarily support the oil sands.

We've discussed the details regarding the Wasit project and how we are taking the initial steps to expand the geographic reach of our robotics technology, primarily in Brazil. Completing Wasit is obviously a very important financial contributor to growth in 2014. The value of this project longer term is how well we can leverage a successful execution to build key relationships in promising markets in the Middle East and beyond.

And finally, Brinderson. The power of Brinderson's embedded position at the facilities they serve gives them the opportunity to sell increased services - capital program services, and, we hope, sister company services. They have a very strong bid table for replacement operations work, which simply means taking over projects currently run by competitors, over $70 million in annual value bids in the third quarter alone, plus opportunities in turnover and upstream capital projects in the West Coast markets.

We believe Brinderson's business model can also prove to be very valuable in the Permian Basin. Combining world-class safety, project management, productivity tools, and quality should allow us to capture businesses rapidly. We also have the opportunity to expand the scope of what Brinderson does through combinations with electrical and instrumentation firms, which could double the market potential of this business.

The drivers for our business units remain strong, and we have the opportunity to drive better growth and margin performance through the combined service approaches. It's early days, but we believe embedded positions will prove to be very valuable across the range of our Energy and Mining businesses.

Let me now reiterate some of the points I made about the Commercial and Structural platform. There is no change in the strong market potential or Fibrwrap's product capability. We do need to accelerate the transition of the Company from an R&D focus to a market-focused company, selling in three primary vertical markets, pipelines, buildings, and transportation. We'll get the North American market back to where we need it to be. The outlook for Asia also remains very promising. The key is for us to accelerate the transfer of our country-specific expertise in that region between markets and press ahead with our seismic program in Japan. The long-term growth projects on a global basis for this technology remain outstanding in my view.

While 2013 has been disappointing, particularly on the heels of a good 2012, we believe Commercial and Structural will prove to be a great business for Aegion. I outlined our work plan earlier and believe this will bolster our performance in the fourth quarter, as well as position the business for a return to growth in 2014. We are recalibrating our topline expectations to 20 percent annual growth and gross margins in the 35 percent to 40 percent range.

While we certainly have our work cut out for us in the fourth quarter, we're off to a good start in October, and we believe we can get there. Management team is focused on ending the year on a strong note and is working hard to build solid momentum going into next year. To allow them the time they need to execute, we have decided to move the Investor Day event originally scheduled for December 5 to June 4, 2014. While it's premature to talk about any detail regarding 2014, hopefully you have taken my remarks that it is shaping up to be a solid year.

With that, let me now turn the call over to the operator for the question-and-answer session, and we appreciate you taking the time and showing your interest in Aegion.

Operator: Certainly. Ladies and gentlemen, if you have a question at this time, please press the star then one on your touch-tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Again, if you have a question, please press star then one.

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Our first question comes from Arnie Ursaner from CJS Securities. Your line is open.

Arnie Ursaner: Good morning. Can you expand a little bit on the visibility you're seeing for Q4 and Q1 in Brinderson since that is a little more of a seasonal business?

John Joseph Burgess: Sure. Well, as I mentioned in the remarks in the third quarter, they have seen quite a bit of - and have already submitted, the significant bid opportunities on maintenance contracts that they do not currently hold, and we have some pretty high expectations for success in a number of those opportunities. I would say that they are also enjoying some good - very good bid table activity on some awarded work related to turnarounds. And then, in the upstream business, there's been a very high level of capital project activity. So we're, at this stage, pretty bullish about how they finish the year and go into 2014.

Arnie Ursaner: OK. My other question relates to the CRTS business. Obviously, you've had some delays, but you had also hoped that the performance you would have would lead to other applications or uses for CRTS with other customers. Have you been successful with that?

John Joseph Burgess: Well, I think we've been successful in capturing work in Brazil, although it's been delayed as well. I think the main issue with that business is they had a smaller application of this project in the Persian Gulf, really, prior to our acquisition. But the major demonstration projects, if you will, are essentially Wasit and some of this follow-on activity in Brazil, which we've not really been able to get on our resume, if you will, just because we have not been able to complete the major coating aspects of primarily the Wasit project.

And of course, if you can go back to, I think, some of the things that we described at the time that I think are still valid, we expect to come out of that project with demonstration of certainly the ability to coat these joints and to coat them in a high-quality way and get the inspections done, but also to get those things done in a very timely fashion once we get out and get into the part of the project that allows us to hit - to get focused on our productivity rates.

And that, both in terms of quality and in demonstrated savings to the end client, is something that we think is going to greatly bolster the interest in that product. But you're kind of selling that conceptually until you get - until we get some of these large projects under our belt, which we've been frustrated by the timing delays.

Arnie Ursaner: Thank you very much.

John Joseph Burgess: You're welcome.

David A. Martin: Thank you.

Operator: Thank you. Our next question comes from Eric Stine from Craig-Hallum. Your line is open.

Eric Stine: Good morning, thanks for taking the questions.

John Joseph Burgess: Thank you, Eric; good morning.

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Eric Stine: Yes, maybe just on Wasit, I mean, I know that while there currently have been many stops and starts here before, I mean, any details or reasons why you've got increased confidence that this does in fact resume in November? And then, how are you thinking about that or what kind of assumptions are embedded in your guidance related to that project?

John Joseph Burgess: We think we're going to get 45 days of coating based on the schedule when we got back on the barge actually to avoid some holiday situations over there. We are doing some work, and the schedule that we have seen for about the last, I would say, three weeks has been the schedule. This 36-inch trench modification work that the primary contractor needs to have done, we understand, is nearing completion. And then, the joint - the pipe is supposed to go in a lot or right after that. So we've not gotten any demob signal for sometime now. So we're feeling better about it. But we consistently call it out in both our expectations and our results because we obviously do not control that situation.

Eric Stine: Right. But being on the barge, I mean, is that a notable difference versus what it's been in the past that gives you that increased confidence?

John Joseph Burgess: Yes. I would say here in the last - I mean, even in the third quarter, we got on the barge to do some smaller diameter piping, and then we came back. I would say up until the third quarter, the work on that project is focused on onshore, which is a smaller piece of the work and not nearly as profitable.

But I will tell you that our expectation is once we hit the barge because of the expense of the barge to the main contractor, that there would have been a greater concern about achieving productivity, certainly, in what we do. But that's just really reflected in productivity on the trenching and the pipe-laying activities that are going on, on the barge, than there has been. But having said that, it's still an expensive proposition once you get that barge on the water, and we expect to get the 40 to 45 days of productivity that we outlined.

Eric Stine: Right. OK, that's helpful. Maybe just turning to Commercial and Structural, you talked about the $100 million kind of near-term pipeline or opportunity that's out there. Just curious what your internal - or your expectation would be based on historicals close times or what percentage you might close. And then, also, how long do you think it takes to kind of get some of these internal measures in place similar to what you did in NAR, so that when you get this business, it's at the kind of margins that you would like?

John Joseph Burgess: Well, I mean, this has been - the things I've described in my remarks are things that - and maybe I should have said this in my remarks, but they shouldn't be interpreted as things that we're starting. These are things that we've been focused on, really, since very early in the year when we were clearly both not building backlog the way we wanted and then not getting backlog that we had into an executable situation. So we put some senior people there.

As I said, we've installed our sales systems and processes that's generated, I think, a step change in the visibility that we had to some of the markets, as well as what's going on with our market and sales force there. The HR issues that I've described have been focused on hard. And as I said, I think we're close to having a built-out team that can go to market effectively in the verticals that I described.

The execution side of the house has been embracing the way we look at productivity measures. While these are different businesses and execution steps are different, and I don't see them overall being together, the process of managing those crew operations are going to look - will look almost exactly like what we do on the Wastewater side of the house. And we've had people in place working through that really over the last four months or five months, and that will be ongoing. So I think most of 2014 will benefit from what I described in my remarks.

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Eric Stine: OK. I appreciate it. Thanks.

Operator: Thank you. Our next question comes from Noelle Dilts from Stifel. Your line is open.

Noelle Dilts: Thanks. Good morning.

John Joseph Burgess: Good morning, Noelle.

Noelle Dilts: First, going back to the Wasit projects, you talked about the floor trenching as being undisclosed. Could you just go into that a bit more? Was this a change to the schedule, or was it just something that you weren't aware of? I'm just kind of curious, given the delays and then this announcement. Just curious about your communications with the main contractor and why you weren't aware of that?

John Joseph Burgess: Well, I think they have done the trenching, that's why we were initially mobilized. And then, when they went out to check it, as you would prior to the time that you're going to lay the actual pipe, that there were some deficiencies that needed to be rectified. I'll have to look at exactly what we said, but I don't think we meant to say that we floated out on the barge, and then there was no trench. There were some issues with the original work that had been done.

Noelle Dilts: OK, good. I just wanted to get some clarification there.

John Joseph Burgess: Sure. No, if we weren't clear, then we should speak a little.

Noelle Dilts: OK. And then, in terms of - you mentioned some pipeline delays in Fyfe and Corrpro, can you give a bit more detail on - if there were some specific large projects that were delayed there?

John Joseph Burgess: Well, in Fyfe, the only delays have been with these nuclear projects, which we originally started. We went into the year with purchase orders in hand and thinking we'd start on those late first quarter. And they have now been pushed into the middle part of 2014. The need to repair those pipes is driven by regulations. So we're confident that, that work will get done, but it's been pushed out of 2013. The other business was - what did you say?

Noelle Dilts: I think you said Corrpro. I may have missed that though.

John Joseph Burgess: I'm sorry, David?

David A. Martin: Yes, you were - I don't think we really talked about Corrpro per se, but we had some pockets of regional areas in the US that just haven't - didn’t have a pickup in sales in the third quarter. That's it.

Noelle Dilts: OK. And then, could you talk about the tax rate and the assumed interest expense for the fourth quarter?

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David A. Martin: For the fourth quarter?

Noelle Dilts: Yes.

David A. Martin: I would expect the tax rate, especially since Brinderson is a larger contribution to the mix, to be much closer to the normalized rate, about 30 percent, maybe a little bit higher. On interest, it'll be very similar to Q3.

Noelle Dilts: OK. Thank you.

David A. Martin: Thank you.

Operator: Thank you. Our next question comes from Liam Burke from Janney Capital Markets. Your line is open.

Liam Burke: Thank you. Good morning, Joe.

John Joseph Burgess: Hey, good morning, Liam.

Liam Burke: Joe, you have resized NAR, and now you're announcing record backlog. Is the organization sized properly if you were to handle all this additional volume?

John Joseph Burgess: I mean, we've actually added some resources in NAR. I think we started the year probably at 56, 57, and we went to 58 and now we have a couple of additional crews on the East Coast, and I know we have an additional crew in Western Canada to deal with volume and possibly in the Western region. David, you might be aware of that. So we're probably in the low-60s now just to handle that additional volume.

I think you'll see a leverage on the OpEx. I mean, David described, we are at a healthier mix, from our perspective anyway, of medium and large diameter. And of course, that drives larger project size, which puts less - allows us to do more with kind of the same OpEx level as opposed to, as we've discussed previously, if we're chasing a lot of small diameter, small dollar value projects. So yes, I mean, to your overall question, I think we have the resources to get that work done.

Liam Burke: OK. And when you purchased Fyfe, one of the challenges was that you had a very solid technology, but needed to be scaled. You went into a fair amount of detail on how you're attacking the verticals now with this technology. Did that change differently when you originally purchased Fyfe and looked at the market and how you would hire sales staff?

John Joseph Burgess:    Yes, I would say probably yes to some extent. The strength of that company is the product. And of course, we have great outstanding internal engineering capabilities. But much of that business operates in a covert market that's kind of engineer-to-engineer, and they're used to - because of that, you end up with the specialty approach to each project. And as I said in my remarks, I think there are some applications, primarily in instrumentation, and primarily in, what I'll just call, simpler applications for building, that we need to take a more simplistic approach towards what we offer.

And then, focus our engineering people on the more dynamic projects around building upgrades to the seismic that are regulatory mandated and, of course, the pipeline business, which is generally

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a pretty rigorous engineering challenge. So I think that's a bit of a different view than we probably had a couple of years ago.

And then of course, we also need to - as I suggested in my remarks, we need to get to a point where the execution side of this business and the book-to-burn side of this business is much more easily scalable. And again, we've seen that issue from time to time in NAR. So we're basically putting in those processes just to make sure that this does not reoccur.

Liam Burke: Great, thank you, Joe.

John Joseph Burgess: You're welcome.

Operator: Thank you. Our next question comes from Gerard Sweeney from Boenning. Your line is open.

Gerry Sweeney: Thank you very much. A couple of quick questions. On the Wasit program, not to beat a dead horse here, but you said about 45 days of activity in the quarter. About how much of the project would that be?

John Joseph Burgess: I think that's about a third of what's left, David. I think David referenced that in the remarks. So we're probably looking at one-third of that by revenue. What is that, $7 million or something like that?

David A. Martin: $7 million.

John Joseph Burgess: $7 million to $8 million, and then you've got - so you have $14 million, $15 million that will spill over into 2014. Of course, it's a very high margin project for us, so it's impactful.

Gerry Sweeney: Got it.

John Joseph Burgess: It's very high margin projects versus it's impact.

Gerry Sweeney: And then, I guess this is probably a little bit more towards David. But the $90 million that you're looking at from the cash flow for the year, any idea of how much of that's from Brinderson?

David A. Martin: In terms of - I'd have to go back and calculate that. I can follow up with you on that.

Gerry Sweeney: OK, we can do that. And that's it from my points, sir. Thank you.

John Joseph Burgess: Thank you.

Operator: Thank you. Once again, if you have a question, please press star then one.

Our next question comes from Glenn Wortman from Sidoti & Company. Your line is open.

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Glenn Wortman: Yes, good morning, everyone.

John Joseph Burgess: Good morning.

Glenn Wortman: Just to get a sense of the composition of the $100 million in near-term opportunities for Fyfe, does that consist of a few large projects, many smaller and medium-sized ones, if you could just help us out there?

John Joseph Burgess: Well, it depends on the segment. The pipeline projects tend to be larger, mainly because these are pressure pipe. As I said in my remarks, we really started to look at the Fyfe business in the context of trying to upgrade our pressure pipe capability from a water business focus. So - but the Fyfe technology right now is only capable - it's man applied. So you can only do it in a pipe large enough that you can get a man in. We are doing some pretty extensive testing on how to use robotics to get that to smaller diameters. But right now, it's man applied.

So you're basically in 36-inch pipe and larger, which means that those are larger scale projects. The nuclear projects, for example, that were deferred to 2014 are $6 million, $7 million revenue projects. So there's line of a sight on additional work within the nuclear space for the Fyfe technologies, which is proving pretty robust. And then there's - the rest of it would be municipal. They've done extensive work on both force mains and pressure pipe in Miami and in Baltimore, and significant work on the West Coast. And so as I indicated in my remarks, we're working on a much more formal approach to take that to a client list that we already enjoy in the wastewater business.

Glenn Wortman: OK, and then just on North America Water and Wastewater, just to square your commentary earlier with some of your comments on last night's press release in the fourth quarter. It seems - your implied guidance, obviously, in the press release seems to suggest a typical seasonal drop-off in NAR, but your other commentary suggest that we won't see any sequential drop-off, if you could just elaborate on that, please.

David A. Martin: Yes. I'll take care of that one, Glenn. Normally, we have a fairly sizable drop off in the business, and I just don't think it's going to be as dramatic. If not, it could be very, very close to what we did in Q3.

Glenn Wortman: OK. All right. Thank you.

David A. Martin: Thank you.

Operator: Thank you. I show no further questions at this time and would like to turn the conference back to Mr. Joe Burgess for closing remarks.

John Joseph Burgess: Just thank you for your continued interest in Aegion. We obviously have our work cut out for us in the fourth quarter. Hopefully, we've outlined for you today though that we're busy working. We're not - it's not a situation where we're waiting for stuff to show up, with a possible exception of our continued delay torture on the Wasit project as we wait to float down and get active with our work. But our folks are in the field looking to make this happen, so that we can kind of grind back into the range that we talked about 3, 4 months ago. And certainly, I think that the businesses are positioned for a strong 2014, which we'll obviously talk about when we meet again here in 90 days. So thank you very much for taking the time to hear our story today.

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Operator: Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program, and you may all disconnect at this time.

END

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