Note 1 - General

3 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1.     GENERAL

The accompanying unaudited consolidated financial statements of Aegion Corporation and its subsidiaries (collectively, “Aegion” or the “Company”) reflect all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair statement of the Company’s financial position as of March 31, 2013 and the results of operations, comprehensive income, statements of equity and cash flows for the quarters ended March 31, 2013 and 2012. The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), the requirements of Form 10-Q and Article 10 of Regulation S-X. Consequently, the unaudited consolidated financial statements do not include all information or footnotes required by GAAP for complete financial statements or all the disclosures normally made in an Annual Report on Form 10-K. Accordingly, the unaudited consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s 2012 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2013. Additionally, certain prior year amounts have been reclassified to conform to the current year presentation.

The results of operations for the quarter ended March 31, 2013 are not necessarily indicative of the results to be expected for the full year.

Acquisitions/Strategic Initiatives

Energy and Mining Segment Reportable Segment

In March 2012, the Company organized United Special Technical Services LLC (“USTS”), a joint venture located in the Sultanate of Oman between United Pipeline Systems and Special Technical Services LLC (“STS”), for the purpose of executing pipeline, piping and flow line high-density polyethylene lining services throughout the Middle East and Northern Africa. United Pipeline Systems holds a fifty-one percent (51%) equity interest in USTS and STS holds the remaining forty-nine percent (49%) equity interest. USTS initiated operations in the second quarter of 2012.

Commercial and Structural Reportable Segment

In April 2012, the Company purchased Fyfe Group’s Asian operations (“Fyfe Asia”), which included all of the equity interests of Fyfe Asia Pte. Ltd, a Singaporean entity (and its interest in two joint ventures located in Borneo and Indonesia), Fyfe (Hong Kong) Limited, Fibrwrap Construction (M) Sdn Bhd, a Malaysian entity, Fyfe Japan Co. Ltd and Fibrwrap Construction Pte. Ltd and Technologies & Art Pte. Ltd., Singaporean entities. Customers in India and China will be served through an exclusive product supply and license agreement. The cash purchase price at closing was $40.7 million. The purchase price was funded out of the Company’s cash balances and by borrowing $18.0 million against the Company’s line of credit.

In January 2012, the Company purchased Fyfe Group’s Latin American operations (“Fyfe LA”), which included all of the equity interests of Fyfe Latin America S.A., a Panamanian entity (and its interest in various joint ventures located in Peru, Costa Rica, Chile and Colombia), Fyfe – Latin America S.A. de C.V., an El Salvadorian entity, and Fibrwrap Construction Latin America S.A., a Panamanian entity. The cash purchase price at closing was $2.3 million. During the first quarter of 2012, the Company paid the sellers an additional $1.1 million based on a preliminary working capital adjustment. An annual payout can be earned based on the achievement of certain performance targets over the three-year period ending December 31, 2014 (the “Fyfe LA earnout”). Fyfe LA provides Fibrwrap® installation services throughout Latin America, as well as provides product and engineering support to installers and applicators of fiber reinforced polymer systems in Latin America. The purchase price was funded out of the Company’s cash balances.

Purchase Price Accounting

The Company completed its accounting for Fyfe LA at December 31, 2012. During the first quarter of 2013, the Company has completed its accounting for the acquisition of Fyfe Asia. These acquisitions made the following contributions to the Company’s revenues and profits during the first quarter of 2013 and 2012, respectively (in thousands):

	Quarter Months Ended March 31,
	2013			2012(1)
Revenues	$	3,151		$	275
Net income(1)		(169	)		(25	)

 (1) The quarter ended March 31, 2012 only includes contributions from Fyfe LA as Fyfe Asia was acquiring in April 2012

The following unaudited pro forma summary presents combined information of the Company as if the Fyfe Asia and Fyfe LA acquisitions had occurred on January 1, 2012 (in thousands):

	Quarter Ended March 31, 2012
Revenues	$	230,593
Net income(1)		6,724

(1)    Includes pro-forma adjustments for purchase price depreciation and amortization as if those intangibles were recorded as of January 1, of the year preceding the respective acquisition date.

The following table summarizes the consideration recorded to acquire Fyfe Asia at its acquisition date (in thousands):

Total cash consideration recorded(1) $ 40,144

(1) Includes the cash purchase price at closing of $40.7 million plus a final working capital adjustment of $0.6 million, which was returned to the Company during the fourth quarter of 2012.

The following table summarizes the fair value of identified assets and liabilities of Fyfe Asia at its acquisition date (in thousands):

Cash	$	1,303
Receivables and cost and estimated earnings in excess of billings		9,022
Inventories		–
Prepaid expenses and other current assets		1,262
Property, plant and equipment		938
Identified intangible assets		14,130
Accounts payable, accrued expenses and billings in excess of cost and estimated earnings		(4,109	)
Deferred tax liabilities		(2,410	)
Total identifiable net assets	$	20,136
Total consideration recorded		40,144
Less: total identifiable net assets		20,136
Goodwill at March 31, 2013	$	20,008

The following adjustments were made during the quarter ended March 31, 2013, after the acquisition of Fyfe Asia as the Company continued its purchase price accounting (in thousands):

Total identifiable net assets at December 31, 2012	$	20,342
Accounts payable, accrued expenses and billings in excess of cost and estimated earnings		206
Total identifiable net assets at March 31, 2013		20,136
Goodwill at December 31, 2012	$	19,802
Increase in goodwill related to acquisition		206
Goodwill at March 31, 2013	$	20,008